Sema4 has signed a definitive agreement to acquire genetic testing company GeneDx from OPKO Health for approximately $623m.

GeneDx provides advanced genomic testing to patients and their families, offering a clinical genomics programme with expertise in exome sequencing for rare and ultra-rare paediatric genetic disorders.

Through this deal, Sema4 expects to strengthen its artificial intelligence (AI)-driven genomic and clinical data intelligence platform.

The transaction includes a $150m upfront payment, 80 million Sema4 shares and an additional $150m based on revenue milestones achieved over the next two years.

With an estimated $350m pro forma revenue projected this year, the combined company is expected to become one of the largest and most advanced genomic clinical testing providers in the US.

Sema4 founder and CEO Eric Schadt said: “This acquisition gives us the opportunity to accelerate the use of genomics as standard of care by providing a deeper menu of precision medicine solutions to our health system partners to better meet their clinical needs.

“Adding GeneDx’s comprehensive dataset and capabilities to our offerings enables us to inform on an even broader range of diseases, further closing the gap between the practice of medicine and the availability of more clinically actionable guidance.

“GeneDx’s operational prowess and market-leading cost structure in exome and genome sequencing will also help accelerate our path to improved gross margins and profitability.”

The company noted that GeneDx’s rare disease diagnostic and exome sequencing services will bring more than 2.1 million expertly annotated phenotypes and more than 300,000 clinical exomes to strengthen its 12 million de-identified clinical records for the Traversa and Centrellis platforms.

Traversa is Sema4’s genomic analysis platform, which is used to optimise health screenings, and Centrellis is its health intelligence platform.

The company plans to use the combined health information database to transform therapy development and patient care.

The transaction, which is subject to Sema4 stockholder approval and other closing conditions, is anticipated to be concluded in the second quarter of the year.