Tech–2405: Genomic Lab for Cancer Looking for Strategic Partner

Tech-2405: Genomic Lab for Cancer Looking for Strategic Partner

Cutting Edge Technology – Explosive Growth Potential


This Lab was doing well and was expected to do business over $5M in revenue in 2020 from new business development partnerships. However, the pandemic dried up those referral routes. The lab has sharply decreased its enterprise valuation from $3M to $1.2M and is also willing to sell majority control. The lab will come without any debt (other than possibly a 10 year low interest loan of $45K from PPP payable from next year), comes with equipment with a book value of $200K and with about 200-300K of AR. It is open for the buyer to pay as little as $200K up front (to cover its immediate cash flow) and rest over a few months. An average private payor payment for CGx test is about $5,000 per sample and so this could be a win-win for both the buyer and the Lab. Buyer can significantly increase your revenue by simply offering this service and plus own a chuck of our client.

This Lab could be an ideal partner for a anatomic pathology lab which currently does not provide molecular testing. The pathology lab can significantly increase its revenue for the mutual benefit for both.

The lab has an ability to grow quickly from its current revenue of $1.5M to over $5M from as little as about 100 CGx samples per month. But it addition it is also doing UTI and PGx tests and is also capable of doing liquid biopsy testing. The Lab is likely to get a substantial commitment from some clinics for UTI testing shortly.

This however is a time sensitive opportunity and our client would need to complete this transaction in a matter of 2-3 weeks.

This three-year old genomic testing laboratory for cancer with cutting-edge technology offers reliable and comprehensive solutions for prevention and treatment of this disease. It can run tests on samples on blood or saliva samples.

The Company is looking for a strategic partner that has experience and contacts in this industry, and can put capital and resources to fuel and support its rapid growth.

In 2018, the revenue was $2.0M and EBITDA was about 500K.  In 2018-2019, it had to reorganize to employee based sales system and its revenues suffered a bit in the process and was $1.5M in revenue and revenue of -$234K.

COMPETITIVE ADVANTAGES

• Offers most comprehensive panel of inherited cancers and only one that covers all 11 hereditary cancers
• Constantly fine-tuning the panel to add or subtract genes for most meaningful assays
• One of few labs that offers tests for hereditary cancers and tumors at the same place
• One of 6 labs capable of doing a test for determining probability of recurrence of breast cancer
•  Excellent Reimbursement
•  In network with Humana-Tricare and BCBS.
• Large Library of Bioinformatics data to work with Pharma companies for drug development
• Connections in place to expand into Latin America and Middle East Markets
• Capability to develop new bioinformatics pipelines for data analysis for other diagnostic and treatment routes
• Expertise to develop and implement other molecular analyses including personalized medicine as well as non-healthcare opportunities

KEY FINANCIALS

  • Revenue: $2.5M in 2018, EBITDA $500K. 2019 Revenue $1.5M, EBITDA -234K (due to reorganizing of sales to employee based)
  • Assets: $200K book value, AR of $200-300K
  • Net Margins of 45-50%
  • Explosive Growth potential
  • One of the few smaller labs with this capability and potential for growth
  • CLIA-accreditation; working on CAP-accreditation
  • Enterprise Valuation – $1.2M. Willing to consider partnership with buyer taking a majority stake.
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