Sema4 acquires GeneDx in pivot back to core mission
Stamford-based Sema4 gained new prominence throughout 2021 by providing rapid polymerase chain reaction (PCR) testing for Covid-19. While the testing was a necessary service for an extraordinary health crisis, Sema4 considered its mission to be an AI-driven genomic and clinical data intelligence platform company, with an eye toward improving medicine atlarge.
In pursuit of this mission, on Jan. 18 Sema4 and Miami-based OPKO Health Inc., a multinational biopharmaceutical and diagnostics company, signed a definitive agreement for Sema4 to acquire OPKO ‘s wholly owned subsidiary, GeneDx Inc., a leader in genomic testing and analysis, for an undisclosed sum.
According to Sema4 CFO Isaac Ro, planning for this acquisition began six months ago.
“Covid testing is a business that we have been in since the early days of the pandemic, but we disclosed and decided to exit that business in the early part of this year, ” Ro said. “The reasons why are several, but in general it is not strategic to SEma4 ‘s core mission. ”
Ro said that Sema4 was initially asked by multiple parties to help in the testing effort and did so because of the obvious need the public had. But now that other companies are in a position to meet the public ‘s need for Covid tests they could focus on providing long-term benefits that come from the research enabled by their acquisition of GeneDx.
“There has been an incredible revolution in genetic testing, ” Ro said of the technological implications of the merger. “Most people are familiar with PCR testing, but there is a higher resolution approach called DNA sequencing, which has started to become more compelling as a routine and everyday tool for use in health care.
“But DNA sequencing-based tests today are still only scratching the surface of what that technology is capable of, ” he added. “We believe you are going to see a rapid shift towards full sequencing of the genome over the next five to10 years. ”
Ro stated that Sema4 will combine the knowledge and mapping of human genetics done by GeneDx with their own artificial intelligence-driven sequencing techniques to make it easier and faster to develop a complete picture of a person ‘s genetic code and tailor health solutions to them, according to Ro.
“We intend to be at the forefront of bringing in that new era, ” he continued. “Scientifically, if you can sequence the entire genome or even a substantial portion of it there ‘s a lot more you can learn than just a simple PCR test which is actually very minimal in what it looks for. ”
Sema4 grew out of the work of researchers who met while working at Mt. Sinai Hospital, while GeneDx was spun off of the work of pioneering researchers at the National Institutes of Health. Ro said that these shared roots in public health-oriented institutions will likely ease frictions during the merger and allow for a smooth transition towards pursuing both medical discovery and returns for investors.
The merger also comes with an infusion of capital in the form of a $200 million private placement from prominent investors in the life sciences space, most notably Pfizer. One of the most promising uses for the technology Sema4 and GeneDx hope to advance through their merger is in developing drugs at faster rates through the better selection of subjects for trials and a fuller understanding of what genetic factors influence their efficacy.
Ro said that while this is just the latest step in Sema4 ‘s growth plan, there are no plans to move employees out of the Stamford area that is home to their primary lab and the majority of their 1,000-plus workforce.