Stamford”™s genomics-testing company Sema4 has entered a definitive agreement with CM Life Sciences to accelerate growth.
The transaction ”“ which values Sema4 at approximately $2 billion ”“ is expected to provide up to $793 million in cash proceeds and includes a fully committed PIPE (private investment in public equity) of $350 million from such growth and life science investors including Casdin Capital, Corvex Management, Fidelity, Morgan Stanley Perceptive, SoftBank, T.Rowe, Viking and existing investors.
CM Life is a special-purpose acquisition company led by institutional investors Casdin Capital and Corvex Management.
The deal is expected to close during the second quarter; upon closing, CM Life Sciences will be renamed and its common stock will be listed on the Nasdaq global market under a name and a ticker symbol to be announced at a later date.
Earlier this week, the Stamford company appointed former Goldman analyst Isaac Ro as CFO. In December, it opened its second clinical laboratory in that city.
“The additional resources will allow us to greatly accelerate our business plans organically and inorganically, developing and bringing in more cutting-edge precision model solutions across multiple disease areas,” Sema4 founder and CEO Eric Schadt said.
“This is the most exciting time in the history of our industry and I look forward to working closely with Eli (Casdin, CIO of Casdin Capital), Keith (Meister, chairman of CM Life Sciences) and their teams to deliver on the massive potential to transform clinical and life sciences through better leveraging of data,” Schadt said.
Sema4 claims to have established the largest, most comprehensive and fastest growing integrated genomic and clinical data platform. Its database includes more than 10 million patient genomic profiles and de-identified clinical records, integrated and delivered in a way that enables physicians to proactively diagnose and manage disease.
The virtuous cycle of data helps improve decision making but also accelerates the development of next generation diagnostic tools and therapeutics.
“We exist in a remarkable period of time as the life sciences and broad health care industries undergo a technology-driven data revolution,” Eli Casdin said. “The disruptive promise in combining these genomic and clinical data sets, at the patient level, is profound but takes a team of experts, the right business model and lots of growth capital. We therefore could not be more excited to lend our partnership and fill the balance sheet for the foremost leader in the field, Eric Schadt and the expert team he”™s assembled at Sema4.
“With an early start, unique business strategy and more than 150 leading data scientists, this is the premier company in one of the biggest, winner-take-most markets in life sciences,” he added.
The combined company is expected to receive proceeds of up to approximately $793 million at the closing of the transaction, up to $343 million of which will be paid to Sema4 stockholders, with the remainder utilized by Sema4 in its business
It will continue to operate under the Sema4 management team, led by Schadt.
“Eric has built a truly unique business at Sema4 with a combination of scale, growth and innovation that we rarely see,” Meister said. “Revenues are projected to grow from $200 million to $500 million and gross margins to double from today to 2023, while Sema4 leverages its existing platform in women”™s health and oncology to quickly grow into high margin relationships and partnerships across health systems and biopharma partners.
“This transaction affords investors the unique opportunity to benefit from Sema4”™s rapid growth, business transformation and the multiple expansion opportunities that we believe this growth will drive,” Meister said.
