Not long after acquiring Resolution Bioscience in a deal worth more than half a billion dollars, Agilent Technologies has resolved to shutter the business, which was developing liquid biopsy tests that were powered by next-generation sequencing technology and meant to be used as companion diagnostics for cancer patients.
Mike McMullen, Agilent’s president and CEO, announced the “difficult decision” during a call with investors about the company’s third-quarter results last week.
“The market for kitted NGS-based companion diagnostics has not developed as we expected. Furthermore, we don’t see a realistic path to profitability,” he said, according to a transcript of the call, adding, “However, our investments in future growth continue.”
Agilent moved to purchase Resolution in the spring of 2021, and the acquisition was completed within about six weeks of the initial announcement. It saw Agilent shell out $550 million in upfront cash, while also offering up to $145 million more if Resolution’s blood tests hit certain commercial goals.
At the time, Agilent said it was expecting to see Resolution’s revenues tick solidly upward over time—from pre-acquisition annual revenues of about $35 million to more than $50 million in its first year under the Agilent umbrella.
Though Agilent doesn’t break out its revenue reports by individual business, McMullen noted on this month’s investor call that Resolution had seen continued “market weakness” as of late.
Drops within the Resolution department and Agilent’s genomics business offset what would have otherwise been a solid win for the company’s diagnostics and genomics segment for the quarter. The pathology business grew by high single digits, while Agilent’s nucleic acid therapeutics saw a boost in the “high teens,” the CEO reported—but altogether, thanks to the headwinds in Resolution and genomics, the overall segment experienced a year-over-year increase of just 3% to reach $349 million for the quarter.
The shuttering of the Resolution business will continue through the final quarter of Agilent’s fiscal year 2023, which ends Oct. 31, and into the early months of its fiscal 2024, Robert McMahon, the company’s chief financial officer, said on the call.
McMahon added that Agilent had taken a pre-tax charge of $291 million in the third quarter because of the wind-down.
During its short-lived period as a member of the Agilent family, Resolution landed a first-of-its-kind FDA approval for the Resolution ctDx FIRST test. It was given the greenlight late last year to become the first liquid biopsy NGS test that could be used as a companion diagnostic to single out people with advanced non-small cell lung cancer who had certain genetic mutations that made them strong candidates for Mirati Therapeutics’ Krazati.
Not long after, Agilent signed a collaboration deal with Quest Diagnostics to make the blood test more widely accessible to non-small cell lung cancer patients across the U.S.