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Third party research

Aiforia Technologies: Strong cross-read from Roche's PathAI takeover - NuWays AG Research (R)

Aiforia Technologies

This is a third party research report and does not necessarily reflect our views or values

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(Link updated)

Last week, Roche announced the acquisition of PathAI for up to $ 1.05bn ($ 750m upfront, $ 300m in earnouts), to be integrated into its Diagnostics division. PathAI is privately held, and few valuation details are provided in connection with the deal. PathAI divested its lab services business to Quest Diagnostics for $ 100m in June 2024. Post-divestment, this could put PathAI's FY25 sales at a range of $ 30-40m, implying a deal valuation of 26-35x sales (incl. earnouts). At Friday close, Aiforia traded at 18.3x EV/S FY25 and 12.4x EV/S FY26 (eNuW).

Large healthtech companies are betting big on AI. In this context, Aiforia stands out as the leading AI play in clinical oncology diagnostics. We make no changes to our DCF model, and reiterate our BUY rating with a € 3.80 PT.