Roche said in Monday's statement that GenMark's respiratory pathogen panels identify the most common viral and bacterial organisms associated with upper respiratory infection, including SARS-CoV-2, complementing its own portfolio of COVID-19 diagnostics products. William Blair analysts said the Swiss company's acquisition of GenMark will "fill a hole as it has no multiplex testing capabilities today, which is a market that has been growing over 15% annually." Schenkel observed prior to news of the Roche acquisition that GenMark was the "only remaining publicly traded pure-play syndromic testing company of scale" and that that market "remains underpenetrated and should continue to be one of the fastest growing sub-segments within infectious disease molecular diagnostics for the foreseeable future." Shares of GenMark rose early last month following a Bloomberg report citing unnamed sources that it was exploring a sale after the Carlsbad, California-based company was approached by potential buyers. At the time, Cowen analyst Doug Schenkel called GenMark "an attractive takeover target for larger diagnostics companies." Roche's tender offer to acquire all outstanding shares of GenMark's common stock represents a premium of approximately 43% to its closing price on Feb. 10 which it noted was the "last trading day before a media report was published speculating about a potential sale process." With this many companies, all flush with cash from sales of products related to COVID-19 or through capital offerings in 2020, we would expect some potentially intense bidding wars for a growing pool of assets, both public and private," the analysts wrote. "By our count, there are no less than 15 companies that will be competing for assets across infectious disease, point-of-care diagnostics, precision oncology, and tools. William Blair analysts in a Monday note said they expect there to be a "massive wave" of consolidation across small- and mid-cap life sciences companies over the coming quarters. That same month, PerkinElmer said it will acquire Oxford Immunotec for about $591 million. Thermo Fisher Scientific announced in January that it plans to purchase point-of-care molecular diagnostics firm Mesa Biotech for $450 million. Roche's deal to buy GenMark is the latest in a sector off to a busy dealmaking start in 2021, boosted by the COVID-19 testing boom.
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