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When Douglas VanOort took the top job at cancer-testing firm NeoGenomics six years ago, he pledged to turn the company into the nation's premier oncology lab.
It looks like Fort Myers-based NeoGenomics is well on its way, with a blockbuster acquisition of rival Clarient from GE Life Sciences for $275 million in cash and stock. Investors cheered the combination, sending NeoGenomics stock up 28%, to as high as $7.29 a share when it announced the deal Oct. 21.
VanOort has a long track record of success in this business. As a top executive at Corning Life Sciences, he grew and spun off Quest Diagnostic into the largest independent clinical diagnostic company in the United States, with $1.5 billion in revenues in 1998.
NeoGenomics and Clarient provide hospitals and clinicians with cancer tests, but the biggest growth promise is helping pharmaceutical companies develop new cancer-treatment drugs and obtain government approvals. Once approved, NeoGenomics can develop companion tests that help physicians prescribe the most effective treatments.
GE Life Sciences, which will have a 32% ownership of the combined companies after the deal is completed later this year, is well-connected to major pharmaceutical companies.
“Those relationships will be important,” says Kieran Murphy, president and CEO of GE Healthcare Life Sciences, in a conference call with investors when the deal was announced.
Pharmaceutical companies are developing so-called “personalized” treatments that use a person's genetics to identify whether a specific drug will help them. “Some biologic drugs won't work with certain patients,” Murphy says. “Patients don't want to go through drug treatments that are ineffective.”
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