Though Mesa Laboratories has spent much of its lifetime working behind the scenes, manufacturing software and supplies used to help healthcare providers, medical device makers and life sciences labs run smoothly, the Colorado-based company is ready for its moment in the spotlight.
Mesa is well on its way to joining the ranks of the medtech developers it currently counts as clients, thanks to its late 2019 acquisition of immunoassay tech maker Gyros Protein Technologies and, now, its proposed purchase of molecular diagnostics company Agena Bioscience.
Agena has developed the FDA-cleared MassArray genomic analysis platform, as well as a variety of assays to profile tumors, assess drug reactions, identify hereditary risks and detect biomarkers linked to a range of conditions, including non-small cell lung cancer, colorectal cancer, melanoma and COVID-19.
Mesa and Agena have reached a definitive agreement that will see Mesa offer up $300 million in cash to acquire the genetic test maker. The transaction will be funded by a combination of Mesa’s cash on hand and a credit facility and is expected to be completed by the end of this year.
The announcement sent Mesa’s stock price climbing steadily upwards of $290 on Tuesday morning—up from $280 at Monday’s close—a point not seen since the end of January, save for a short-lived peak in late July.
“We are proud of our track record in bringing the power of genomics to the clinical setting in hereditary diseases, pharmacogenomics, oncology, infectious disease and sample integrity testing. Our robust technology platform along with deep customer partnership has been the foundation of our success,” said Agena CEO Peter Dansky. “We look forward to working with the Mesa team to expand the applications we deliver and innovate new technologies for clinical genomics.”
Once the transaction is complete, Dansky will become the head of a new clinical genomics division at Mesa.
Within the first year of the buyout, Mesa said it expects Agena to bring in between $63 million and $67 million in revenue, plus an additional $3 million to $5 million in COVID testing revenue. In subsequent years, even as COVID-related revenues wind down, Mesa is predicting that its new division will generate continued organic growth in the high single digits, with gross profit margins around 65%.
That’ll build on Mesa’s recent growth spurt. In the first quarter of the company’s fiscal year 2022, which ended June 30, it raked in nearly $35 million in revenues, up 17% from the same period last year. That brought Mesa’s net profit for the quarter to just under $2 million, a 64% surge over last year’s numbers.
Those first-quarter revenues were helped along by year-over-year organic growth of nearly 50% in Mesa’s biopharmaceutical development segment, which was formed after the $180 million acquisition of Gyros Protein Technologies about two years ago.