Labcorp (NYSE: LH), a global leader in innovative laboratory services, announced on March 11, 2025, that it has entered into an agreement to acquire select assets of BioReference Health, a wholly owned subsidiary of OPKO Health, Inc. (Nasdaq: OPK). The transaction, valued at up to $225 million, focuses on BioReference Health's laboratory testing businesses specializing in oncology and oncology-related clinical testing services across the United States.
The acquisition includes $192.5 million payable at closing and up to $32.5 million in performance-based earnouts. The assets being acquired currently generate approximately $85-100 million in annual revenue and are expected to be accretive to Labcorp's earnings in the first year.
Mark Schroeder, EVP and President of Diagnostics Laboratories and Chief Operations Officer at Labcorp, emphasized the strategic importance of the acquisition: "By integrating BioReference Health's oncology and related clinical testing services into our portfolio, we're providing greater access to our world-class services to patients, physicians and healthcare providers across the country. This acquisition also aligns with our strategy to lead in oncology and reinforces our commitment to advancing cancer care through innovative and comprehensive laboratory services."
The transaction is anticipated to close in the second half of 2025, subject to customary closing conditions and remaining applicable state regulatory approvals.
Strategic Implications for Both Companies
For Labcorp, this acquisition further solidifies its position as an industry leader in oncology diagnostics. The company's extensive portfolio of diagnostic tests in cancer care will expand, providing patients, physicians, and customers with greater access to comprehensive laboratory services, scientific expertise, and enhanced testing capabilities.
For OPKO Health, the transaction represents a strategic move to streamline BioReference Health's operations. Dr. Phillip Frost, Chairman and Chief Executive Officer of OPKO, stated: "This transaction with Labcorp represents another important step for OPKO Health to further streamline BioReference Health's operations to achieve profitability. BioReference Health will maintain its core clinical testing services in the New York and New Jersey region and have the ability to further expand its urology franchise with its proprietary 4Kscore test."
Upon closing, BioReference Health will continue to operate its core clinical testing services in the New York and New Jersey region and maintain its 4Kscore franchise, which represented approximately $300 million in revenue for 2024.
Market Impact and Industry Context
The diagnostic testing market, particularly in oncology, has seen significant consolidation in recent years as companies seek to expand their testing capabilities and geographic reach. This acquisition reflects the ongoing trend of larger laboratory service providers acquiring specialized testing assets to enhance their comprehensive offerings.
Cancer diagnostics remains a critical growth area in laboratory services, with increasing demand for specialized and advanced testing to guide precision medicine approaches in oncology. Labcorp's acquisition of these oncology-focused assets from BioReference Health aligns with the industry's movement toward more integrated and comprehensive diagnostic capabilities.
Financial Advisors and Legal Counsel
Lazard is serving as Labcorp's financial advisor for the transaction, with Hogan Lovells and Kilpatrick Townsend providing legal counsel. OPKO Health has engaged Piper Sandler & Co. as its financial advisor, with Greenberg Traurig serving as legal counsel.
Future Outlook
The acquisition is expected to strengthen Labcorp's comprehensive diagnostic offerings in oncology while allowing BioReference Health to focus on its core regional operations and specialty testing in urology. Industry analysts will be watching closely to see how this transaction affects both companies' market positions and financial performance in the coming years.
For patients and healthcare providers, the acquisition promises expanded access to Labcorp's extensive testing capabilities, potentially improving the diagnostic journey for cancer patients across the United States.
