Sonic Healthcare acquires 20% stake in Microba Life Sciences
Sonic Healthcare will also assist Microba in commercialising its microbiome testing technology in new markets.
Medical diagnostics provider Sonic Healthcare (ASX: SHL) has announced it will spend $17.8 million on the purchase of a 19.99% stake in precision microbiome company Microba Life Sciences (ASX: MAP).
Under the terms of the deal, Microba will issue Sonic with new fully paid ordinary shares at $0.26 each to make Sonic a substantial shareholder.
Sonic will also seek to acquire unlisted options exercisable at $0.33 per share with an expiry of 18 months and representing a further 5% of Microba’s issued share capital.
Post-transaction, Microba’s pro-forma cash balance will be $43.8 million, allowing it to continue advancing its microbiome therapeutics and testing into the hands of clinicians and patients globally to improve standard of care treatments.
Strategic alliance
Sonic and Microba have also agreed initial binding terms for a strategic alliance to deliver Microba’s microbiome testing technology to new global markets.
The agreement will enable Sonic and its subsidiaries to exclusively distribute Microba’s products to customers, including general practitioners and specialists, across Germany, Belgium and the UK for an initial period of 12 months and the possibility of extension to a full license and distribution arrangement.
Sonic and its subsidiaries will also have non-exclusive distribution rights to markets in Switzerland, the US, Australia and New Zealand.
The partnership is expected to significantly increase Microba’s addressable market by bringing its testing products to Sonic’s existing healthcare professional customer base.
As part of the alliance terms, Sonic’s chief medical officer Dr Stephen Fairy will join Microba’s medical advisory board responsible for governing the scientific direction of the company’s commercial activities.
Sonic has said it will not seek a position on Microba’s board of directors.
Company strengths
Sonic chief executive officer Dr Colin Goldschmidt said the deal capitalises on the strengths of both companies.
“We pride ourselves on delivering accurate, reliable medical diagnostics services using leading laboratory and informatics technologies our partnership with Microba exemplifies our commitment to invest in cutting-edge developments in lab medicine,” he said.
“We see microbiome testing becoming a key part of pathology in the coming years and are excited about the opportunities that Microba’s technology will provide for global operations, as well as our referring clinicians and patients.”
About the partners
Sonic is one of the world’s largest medical diagnostics companies which globally employs more than 41,000 people.
The group has a market capitalisation of around $16 billion and generated a revenue of $9.3 billion in the 2022 financial year.
Microba is driving the discovery and development of novel therapeutics for major chronic diseases and delivering gut microbiome testing services globally to researchers, clinicians, and consumers.
Through partnerships with leading organisations, the company is powering the discovery of new relationships between microbiomes and disease for the development of new health solutions.