Assistant Managing Editor

In a sign that the underrated companion diagnostics space is making wider commercial inroads, behemoth testing firm Laboratory Corp. of America Holdings is snatching up Monogram Biosciences Inc. in a deal valued at about $155 million.

LabCorp is paying $4.55 per share for the South San Francisco-based firm - a whopping 170 percent premium to Monogram's Monday closing price of $1.68, though still below the firm's 52-week high of $7.44. That equity value totals about $107 million, but LabCorp also is picking up about $48 million in Monogram debt.

Shares of Monogram (NASDAQ:MGRM) soared 169 percent, or $2.84, to close Tuesday at $4.52.

Many of the specific details still have to be finalized, such as whether Monogram's products and services would be integrated with LabCorp's or if the firm would continue operating as a wholly owned subsidiary, but the deal, set to close in the third quarter, clearly is "an important step forward for personalized medicine," Alfred Merriweather, Monogram's chief financial officer, told BioWorld Today.

The concept of getting a customized therapy to a patient based on disease and genetic makeup, personalized medicine has long been a biotech buzzword. South San Francisco-based Genentech (now a Roche subsidiary) came out with the first big hit, breast cancer drug Herceptin (trastuzumab), which specifically targets women with HER2-positive disease, and Monogram itself was part of a 2007 success story when its CCR5 Trofile assay was adopted as a companion diagnostic for Pfizer Inc.'s HIV drug Selzentry (maraviroc). But aside from a few notable wins, progress in that space has been slow, due in part to the fact that developing a companion diagnostic in tandem with a drug is only possible when the drug's exact mechanism is known - sometimes it's not.

And some analysts have pointed out the difficulty of creating and sustaining a profitable business with diagnostics, which can be developed much more quickly and for substantially less than drugs, leading to a more competitive marketplace.

For its part, Monogram already is on the market with its HERmark assay, targeting breast cancer patients' HER2 status for possible Herceptin treatment, as well as Trofile, and has focused the efforts of its 30-member sales team on "capturing the value" of products' commercial potential, Merriweather said.

Pfizer has filed to expand the use of Selzentry to treatment-naïve patients, and Monogram is looking to the recently established joint venture between the New York-based pharma and London-based GlaxoSmithKline plc to broaden Selzentry's - and, thus, Trofile's - use.

Monogram also has two HIV tests, PhenoSense and PhenoSense GT, which measure individual patient viral drug resistance. The company said those tests are used routinely by doctors to manage patient therapy, and Monogram also is working with biotech firms, such as Foster City, Calif.-based Gilead Sciences Inc., with which it agreed to provide resistance testing and consulting services for Phase III trials of elvitegravir, Gilead's integrase inhibitor.

In oncology, the firm is working on its VeraTag technology for use with other cancer therapies. Following the success of the HIV deal with Pfizer, Monogram certainly plans to "go down that same road" in oncology, Merriweather said.

The firm reported revenues of $14.2 million for the first quarter, slightly below consensus estimates of $15.2 million. With careful spending, Monogram said it anticipated hitting the cash-flow breakeven point by the fourth quarter.

As of March 31, Monogram had $13.7 million in cash.