USA — Agilent Technologies, a prominent player in the laboratory instruments sector, has made the tough call to shut down Resolution Bioscience, a pioneering liquid biopsy business that it acquired in 2021 for a substantial sum of US$550 million.

This abrupt decision marks a significant shift in Agilent’s strategic direction, underlining the intricate nature of the biotech market and the unpredictable outcomes of ambitious ventures.

As the sun sets on Resolution Bioscience, Agilent is set to gradually wind down its operations based in Seattle over the upcoming months, as confirmed by company spokesperson Sarah Litton in a recent email communication.

Regrettably, the precise number of employees who will be affected by this closure remains undisclosed. This unforeseen closure stems from Agilent’s intricate assessment of the liquid biopsy landscape.

CEO Mike McMullen, speaking on a recent earnings call, revealed that Agilent had opted for this decisive action due to unexpected developments in the market for kit-based, next-generation sequencing (NGS) companion diagnostics (CDx).

These ventures failed to materialize as anticipated, and the prospect of achieving profitability became increasingly dim.

McMullen’s statement poignantly highlighted this challenging decision: “Furthermore, we don’t see a realistic path to profitability.”

Unlike traditional biopsies, which entail the direct testing of tumor tissue, a liquid biopsy involves a blood test that can identify cancer cells or DNA fragments circulating within the bloodstream.

Several liquid biopsy tests have garnered approval from the Food and Drug Administration, including offerings from Guardant Health, Foundation Medicine, and Roche.

These innovative tests bear the potential to revolutionize cancer treatment by enabling tailored interventions and earlier cancer detection. Yet, the journey towards realizing the full potential of these diagnostics remains a work in progress.

The backdrop of this decision is influenced by the tumultuous developments in the biotech industry. The acquisition of liquid biopsy maker Grail by Illumina in a staggering US$7.1 billion deal in 2021 sparked not only market excitement but also fierce resistance.

The proxy battle that ensued resulted in the ousting of Illumina’s chairman and the resignation of its CEO. Ultimately, the Federal Trade Commission intervened in April, compelling Illumina to divest Grail to preserve market competition.

Agilent’s vision for the Resolution Bioscience acquisition was to augment its existing immunohistochemistry (IHC) business with the addition of next-generation sequencing-based companion diagnostics capabilities.

The company also envisaged a promising future in the realm of liquid biopsy kits. However, as Litton eloquently admitted, “What we have come to recognize is that the market for distributed, kit-based NGS-based diagnostics has not developed.”

This strategic shift has taken a toll on Agilent’s financial outlook, as evident from the substantial pre-tax charge of US$291 million recorded in the third quarter associated with the Resolution Bioscience closure.

Consequently, the company has adjusted its full-year revenue projection, anticipating a range of US$6.8 billion to US$6.85 billion, signifying a decline of 0.7% to flat results compared to the preceding year.

While this downward revision can be attributed to various factors, including cautious spending by laboratory customers and the impact of the Resolution closure, the primary driver is the subdued demand forecast in China.

For all the latest healthcare industry news from Africa and the World, subscribe to our NEWSLETTER, and YouTube Channel, follow us on Twitter and LinkedIn, and like us on Facebook.