NEW YORK – Quest Diagnostics and Haystack Oncology said Thursday that they have reached a definitive agreement for Quest to acquire Haystack for up to $450 million in cash.
Haystack, a 2021 spin out from Johns Hopkins, has developed a circulating tumor DNA detection method for blood-based minimal residual disease (MRD) testing.
Developed by Hopkins cancer researcher Bert Vogelstein and colleagues, the company's tumor-informed, personalized approach follows the model of several other companies that have launched MRD testing services in recent years.
Under the terms of the agreement, Quest will pay Haystack $300 million in cash at closing, net of cash acquired, and up to an additional $150 million based on future performance milestones. The transaction is expected to be completed in the second quarter, subject to customary regulatory review.
Quest intends to begin providing MRD testing based on the Haystack technology by the beginning of 2024, focusing its initial development on colorectal, breast, and lung cancer.
Quest CEO and President Jim Davis called the Haystack technology "best in class" and said the firm's platform will position it to lead in the fast-growing MRD space.
"With Quest, we expect to increase and accelerate access to important tests that will improve the quality of cancer MRD detection and recurrence monitoring for patients," added Haystack CEO and President Dan Edelstein.