BioTechne snaps up Exosome Diagnostics in $250M deal

Minneapolis-based biotech supplier Bio-Techne Corp. has agreed to pay $250 million, and maybe more, to acquire a promising Boston-area firm that makes precision-medicine technology used to detect cancer without a tissue biopsy.

Bio-Techne plans to acquire privately held Exosome Diagnostics Inc., by early August, using cash on hand and a revolving line of credit. If Exosome's technologies achieve specific profitable milestones through 2022, Bio-Techne would pay Exosome's private investors up to $325 million in additional payments.

"ExosomeDx's technology is a game-changer, and positions Bio-Techne to be a leader in the rapidly growing noninvasive liquid biopsy market," Bio-Techne Chief Executive Charles Kummeth said in the announcement. "The noninvasive nature of this technology creates a new process for liquid biopsies and is likely to transform medical practice."

Exosome Diagnostics was founded on the discoveries of Dr. Johan Skog, who first realized while at Massachusetts General Hospital that snippets of RNA extracted from genetic components called exosomes could be harvested at high quality from bodily fluids and then used to detect tumor mutations.

Today, Exosome Diagnostics is developing diagnostics using fluids like serum, plasma, urine, spinal fluid and saliva that contain DNA, RNA and proteins from their original cells. The proprietary technology works with liquid samples that are fresh or frozen, without needing tissue.

"Highly robust and versatile, our technology holds the potential to deliver on the promise of personalized health care to guide treatment decisions precisely and in real-time along the entire patient care continuum," Exosome Diagnostics said on its website.

Exosome Diagnostics markets a test called "ExoDx Protstate [IntelliScore]," or EPI, which is a urine-based analysis that can be used by urologists to decide on the need for a prostate biopsy in patients who have an ambiguous PSA test result. A PSA, or prostate-specific antigen, is a protein whose presence in a test result may signal the need for more-invasive testing for prostate cancer, depending on patient history and the quantity of PSA in the sample.

The company also has patents and proprietary applications to develop novel fluid-based diagnostics for cancers that can be difficult to detect, including bladder, kidney and breast cancer, and glioblastoma, a type of brain cancer.

"EPI is the first of many diagnostic tests we have in our pipeline and we remain confident that the underlying technology of exosome- and [cell-free]-DNA-based analysis, along with the artificial-intelligence tools we have developed, can deconvolute complex gene-expression data and find diagnostic signatures that are early predictors of disease progression," Exosome CEO John Boyce said in the announcement.

Bio-Techne, meanwhile, is expanding its cellular-product offerings to include the "CAR-T" market, a hot field in cancer treatment that involves extracting a person's immune cells and genetically modifying them to fight cancer before reinserting them back into the patient.

"Following this acquisition, the company now sells solutions to the entire workflow of cancer: research, diagnostics, and therapeutics," Kummeth said, noting that the Exosome Diagnostics deal will be Bio-Techne's 14th corporate acquisition in five years, "and our most promising to date."

Bio-Techne has about 1,800 employees at its locations in northeast Minneapolis and elsewhere. The company had sales of $563 million for the 12 months that ended in June 2017, representing 6 percent organic revenue growth after excluding the impact of acquisitions and international currency fluctuations.

Bio-Techne stock dropped $1.22 a share, or 0.8 percent, closing at $157.03 Tuesday, following the deal announcement Monday night.

Joe Carlson • 612-673-4779