Agilent Technologies (stock code: A.N) announced on September 12th, 2023 that it is selling its subsidiary, Resolution Bioscience, to the colorectal cancer early screening giant Exact Sciences (stock code: EXAS.O). The sale amount has not been disclosed, and both parties have stated that it is not significant. Resolution was acquired by Agilent in May 2021 for $695 million, with the initial intent of integrating its expertise in NGS, companion diagnostics, and precision medicine into Agilent’s business portfolio. However, Agilent expressed disappointment with Resolution’s NGS-related product sales, leading to their announcement last month, alongside their Q3 2023 financial report, that they intended to discontinue the Resolution business.
When Agilent acquired Resolution, the latter had already established a non-invasive liquid biopsy testing platform, serving the biopharmaceutical and clinical oncology diagnostic testing markets. Resolution also had its own CLIA laboratory, and its Homologous Recombination Deficiency (HRD) assay received FDA Breakthrough Device Designation. At the time of the acquisition, Agilent estimated that Resolution could generate $50-55 million in revenue for them in 2021.
Agilent has consistently sought to expand its presence in the NGS field, with its SureSelect NGS target enrichment and library preparation product lines being used by hundreds of global customers in cancer testing and genetic diseases.
However, Resolution did have its achievements during its time with Agilent. At the end of last year, Resolution helped Agilent obtain FDA clearance for a companion diagnostic product for the non-small cell lung cancer drug KRAZATI, targeting the KRAS G12C gene mutation. It was one of the few companion diagnostic products from Agilent to receive FDA clearance, the previous one being a companion diagnostic project for breast cancer Ki-67 developed in collaboration with Dako.
While Resolution’s sales were not explicitly reflected in Agilent’s financial reports, it is evident that the Diagnostic and Genomic Solutions business unit, where Resolution was situated, generated $349 million in revenue in Q3 of this year, a 3% increase from the same period last year. The company attributes this growth to increased demand for its immunohistochemistry pathology diagnostic products and the expansion of its nucleic acid reagent business, rather than contributions from Resolution. This explains Agilent’s disappointment and urgency to divest Resolution.
Although Exact Sciences’ “cash cow,” Cologuard, brings in approximately $1.4 billion in annual revenue, the company’s ambitions extend beyond this. Exact Sciences has been consistently diversifying its business beyond colorectal cancer early screening. In January 2021, they acquired PreventionGenetics, a DNA testing company that offers over 5,000 genetic tests, including comprehensive exome and genome analysis, for almost all clinically relevant genes and customized analyses. Exact Sciences is also involved in broad cancer screening with its ONCOTYPE series, which encompasses gene expression and liquid biopsy testing for breast, prostate, and colon cancer.
While Exact Sciences has clear ambitions in the field of cancer screening, it seems to be lacking in the area of companion diagnostics. It can be inferred that Exact Sciences is acquiring Resolution, which has already made some progress in the companion diagnostics field, at a reasonable price, with the belief that it can effectively leverage Resolution to strengthen its competitive position in the field of cancer testing.
