ProPhase Labs Announces Definitive Agreement to Acquire CLIA Accredited Lab Certified for COVID-19 and Upper Respiratory Test...
October 23 2020 - 8:30AM
ProPhase Labs, Inc. (NASDAQ: PRPH), a diversified medical science
and technology company, announced today a definitive agreement to
acquire a Clinical Laboratory Improvement Amendments (CLIA)
accredited laboratory. The lab is approved for a variety of
important medical tests, including COVID-19 and Respiratory
Pathogen Panel (RPP) Molecular tests. The lab will be owned by the
Company’s new subsidiary, ProPhase Diagnostics, Inc., which has
been formed to aggregate medical testing business opportunities and
expand the lab’s capabilities and capacity.
Ted Karkus, Chairman and Chief Executive Officer
of ProPhase stated: “Over the past six months, the Company has met
with several developers, manufacturers and processors of test kits.
Bill Phillips, COO of Spectrum Solutions, an industry leading
molecular diagnostic solutions company that has received FDA
Emergency Use Authorization for their saliva collection COVID-19
test kit, was asked to comment on the ProPhase Diagnostics
transaction. Mr. Phillips stated: “We are always searching for
qualified labs to process our test kits. We welcome ProPhase
Diagnostics to the diagnostic testing industry and look forward to
working with and referring customers to them.”
The lab being acquired by ProPhase Diagnostics
is Confucius Plaza Medical Laboratory Corp. (“Confucius Labs”), and
is headquartered in Old Bridge, New Jersey. The approximately 4,000
square feet lab is a full service Clinical and Molecular lab that
provides a wide range of testing for diagnosis, screening and
evaluation of diseases, including COVID-19 viral and antibody
tests. There is significant current demand for COVID-19 testing.
However, with its RPP testing certification, the lab is also able
to process tests for a variety of influenza, respiratory viruses,
pneumonia-causing bacteria and other infectious diseases.
Additional laboratory equipment has been
ordered, which the Company expects will be delivered and installed
within the next few weeks. The new equipment will expand lab
capacity to enable the Company to process approximately 7,000 –
8,000 COVID-19 tests per day, subject to adequate staffing and
customer demand. As demand for the Company’s diagnostics services
increases, the Company intends to further expand its testing
services by expanding the current lab capacity and/or by acquiring
additional facilities.
Mr. Karkus added: “We spent six months
evaluating the medical test lab business and searching for the
right acquisition candidates to lead our entry into this industry.
In Confucius Labs, we found the ideal opportunity for an East Coast
based CLIA accredited lab for COVID-19 and other medical testing
capabilities. Confucius Labs is a well-run lab that was founded and
operated by Arvind Gurnani, an experienced entrepreneur in this
space who also runs two similar labs.”
The acquisition is an all cash transaction
valued at $2.5 million. The closing of the transaction is subject
to customary closing conditions, which the parties expect will be
completed in short order. Mr. Gurnani has agreed to provide
transition services, including continued operational oversight of
the lab. The current lab director, lab manager and all employees of
the lab are expected to remain employed by the lab. “I look forward
to working with ProPhase and assisting with the growth of their lab
business as well as building a strategic relationship with the
Company,” stated Mr. Gurnani.
Mr. Karkus concluded, “ProPhase Diagnostics will
focus on diagnostic testing and processing. Given the planned ramp
up of capacity with the purchase of the latest and most efficient
equipment, we believe that we will be able to offer highly
competitive pricing as well as 24-hour reporting of results as
needed. In fact, for local businesses, we may even be able to
provide same-day molecular lab testing results. We are also
continuing our search for additional acquisition opportunities that
will expand our testing capabilities, and we will seek out new
sources of business for Confucius Labs and for any other
diagnostics businesses we acquire.”
About ProPhase
Labs
ProPhase Labs (NASDAQ: PRPH) is a manufacturing
and marketing company with deep experience with OTC consumer
healthcare products and dietary supplements. The Company is engaged
in the research, development, manufacture, distribution, marketing
and sale of OTC consumer healthcare products and dietary
supplements in the United States. This includes the development and
marketing of dietary supplements under the TK
Supplements® brand. The Company is also developing ProPhase
Diagnostics, Inc. to offer COVID-19 and other Respiratory Pathogen
Panel (RPP) testing services. For more information visit us
at www.ProPhaseLabs.com.
Forward-Looking Statements
Except for the historical information contained
herein, this document contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding the Company’s plans to develop
and grow its new diagnostic testing business and its expectations
regarding testing capacity. Management believes that these
forward-looking statements are reasonable as and when made.
However, such forward-looking statements involve known and unknown
risks, uncertainties, and other factors that may cause actual
results to differ materially from those projected in the
forward-looking statements. These risks and uncertainties include
but are not limited to the risk factors listed from time to time in
our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
any subsequent SEC filings.
Investor Relations Chris Tyson Executive Vice
President MZ Group – MZ North America (949) 491-8235
PRPH@mzgroup.us www.mzgroup.us
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