Quest makes hay for $300m

Five months from company launch to acquisition: full marks to the management of the liquid biopsy group Haystack Oncology. Quest Diagnostics, needing to bulk up following a sharper than expected decline in its Covid testing revenues, yesterday bought Haystack for $300m cash up front, gaining Haystack’s cancer blood test for minimal residual disease. The unnamed test identifies circulating tumour DNA in a patient’s bloodstream following tumour resection; Quest plans to adapt the assay and launch it next year. Initial efforts will focus on developing MRD tests for colorectal, breast and lung cancers, with Quest paying out up to $150m more on achievement of performance milestones. Quest chose Haystack after holding “many discussions with many of the players in the MRD space”, Jim Davis, Quest’s chief executive, said on the group’s first-quarter earnings call yesterday. Quest believes that Haystack’s test is one of the most sensitive, and “best in class”. But five similar tests are already available, and while not all will compete directly with Quest’s new test the presence of large groups like Guardant could make for a tough battle for market share.