Labcorp acquires BioReference Health, Cancer Detection Business: Industry consolidation accelerates

Labcorp， This globally renowned medical laboratory testing company recently announced its acquisition of BioReference Health's cancer testing business for $192.5 million, with an additional $32.5 million tied to revenue targets. This transaction involves oncology and related clinical testing services, but does not include BioReference's business in urology and some core testing areas. This is Labcorp's second acquisition of BioReference assets in just one year, indicating that its expansion strategy in the medical testing market is still ongoing.

Firstly, why is BioReference sold? BioReference belongs to Opko Health, a Miami based company that has experienced a decline in revenue in recent years, with a loss of $86.7 million in 2024. Faced with financial pressure, Opko chose to reduce BioReference's operating costs and sell some assets to optimize its business structure and improve profitability.

In fact, this is the second time Opko has sold assets to Labcorp within a year - in March 2023, Opko sold BioReference's clinical diagnostics and reproductive health business to Labcorp for $237.5 million, with an annual revenue of approximately $100 million. The tumor detection business in this transaction is expected to contribute $85 million to $100 million in revenue annually. Phillip Frost, Chairman and CEO of Opko, believes that this transaction will help Opko focus more on its core business while improving its financial situation.

Secondly, this acquisition is part of Labcorp's ongoing expansion strategy. According to its 2024 financial report, the company invested a total of $839 million in mergers and acquisitions last year, and the acquisition of BioReference's tumor testing business is its second largest merger and acquisition transaction of 2024, second only to the $240.8 million acquisition of Invitae genetic testing assets. Labcorp's expansion direction is very clear, which is to accelerate its layout in high growth fields such as precision medicine, cancer testing, and genetic testing, in order to enhance market competitiveness and expand revenue sources.

Furthermore, Labcorp's move not only strengthens its position in the oncology testing market, but also reflects the trend of integration in the medical laboratory testing industry. In recent years, with the increasing demand for precision medicine and personalized treatment, cancer testing has become a fiercely competitive and profitable niche market. The main players in this field, such as Quest Diagnostics and Exact Sciences, are constantly strengthening their technological capabilities and market share. Through this acquisition, Labcorp will further expand the coverage of its testing business, provide more comprehensive cancer testing solutions, and engage in more direct competition with its competitors. Meanwhile, for BioReference's existing customers, there may be changes in service providers in the future that could affect the market landscape.

Although Labcorp plans to complete the transaction in the second half of 2025, it still needs to meet customary closing conditions and obtain approval from state regulatory authorities. Given that Labcorp has successfully acquired other businesses of BioReference, there is a high likelihood that this transaction will be approved. For Labcorp, successfully integrating BioReference's tumor detection business and ensuring a smooth transition for customers will be a challenge. But in the long run, this acquisition will help Labcorp gain a larger share in the cancer testing market, enhance its technological capabilities, and drive future growth.

Overall, this acquisition is an important step in the wave of integration in the medical testing industry. Opko improves its financial situation by selling BioReference assets, while Labcorp further expands its tumor detection business and strengthens its market position. In the future, with the continuous growth of demand for precision medicine and cancer testing, competition in the laboratory testing industry will become more intense, and the trend of mergers and acquisitions may continue.