Progenity Sells Lab Business To Northwest Pathology

by Jondavid Klipp | Jan 15, 2022 | Lab Acquisition, Northwest Pathology, Progenity

Progenity Sells Lab Business To Northwest Pathology

Progenity Inc. (San Diego, CA) has sold its lab business, Avero Diagnostics (Irving, TX), to Northwest Pathology (Bellingham, WA) for $10.9 million in cash. The sale of Avero Diagnostics is expected to reduce Progenity’s annual operating expenses by approximately $28 million. Progenity now expects to focus on its research and development efforts for new drugs and diagnostic tests.

Avero Diagnostics (aka Mattison Pathology, LLP) performs anatomic, genetic and Covid tests at CLIA-certified labs in Lubbock and Irving, Texas. Annual revenue is approximately $40 million. Avero was originally founded by Tom Mattison, MD, and Trae Mattison, MD, in 2004, and then sold to Progenity in 2015.

Northwest Pathology, which employs 10 pathologists, operates a full-service lab and provides pathology services to 13 hospitals and more than 100 outpatient clinics in Washington and Alaska.

Progenity To Close Genetics Lab To Conserve Cash

by Jondavid Klipp | Jun 15, 2021 | Progenity

Progenity To Close Genetics Lab To Conserve Cash

Progenity Inc. (San Diego, CA) says it will close its genetics lab in Ann Arbor, Michigan, to conserve cash and will now focus on its drug delivery technologies and therapeutics.

Progenity’s Michigan lab specializes in noninvasive prenatal testing (NIPT) to determine the risk that a baby will be born with certain genetic abnormalities. Closing this lab and laying off its 374 employees will result in about $130 million in annualized cost savings, according to Progenity.

In addition, Progenity says it’s evaluating the potential to raise capital by selling its Avero Diagnostics anatomic pathology laboratory in Texas. Avero Diagnostics is nearing operating profitability with projected revenue of $35-$40 million for 2021, according to Progenity.

The decision to restructure comes less than one year after Progenity’s IPO (see LE, July 2020).

As of March 31, 2021, Progenity had cash and cash equivalents of $65 million and had accumulated losses totaling $574 million since being formed in 2012. For the three months ended March 31, 2021, the company reported a net loss of $32 million on revenue of $24.5 million.