Here’s a classic corporate move: when you have a business that’s doing okay but isn’t the future, you sell it to someone who thinks it is. That’s what CareDx Inc. (CDNA) is doing, agreeing to sell its Lab Products unit to EuroBio Scientific for $170 million in cash. The deal, approved by both boards, should wrap up by the end of the third quarter this year.
Why sell? Because CareDx has other, faster-growing fish to fry. The company is pivoting hard toward its core Testing Services and Patient and Digital Solutions businesses, which are on a tear. In the first quarter, Testing Services revenue shot up 48% year-over-year, while Patient and Digital Solutions grew 33%. The Lab Products unit, which makes PCR and next-generation sequencing diagnostic kits, saw revenue dip 4% to about $10 million. It also operates on a different, more globally-focused model than CareDx’s primarily U.S.-centric services business. So, out it goes.
"This divestiture aligns with our focus on our core Testing Services and Patient and Digital Solutions businesses," said John Hanna, president and CEO of CareDx. He credited a "solutions-selling strategy" for the strong growth. In other words, they’re doubling down on what’s working.
The deal terms are straightforward: $170 million in cash at closing, plus CareDx will provide transition services for at least six months. There’s also a commercial twist: EuroBio Scientific is granting CareDx exclusive, perpetual rights to distribute certain post-transplant monitoring IVD tests in North America, including AlloSeq cfDNA, the kit-based version of CareDx’s AlloSure test. So, CareDx isn’t completely walking away from the product side; it’s just handing off the manufacturing and keeping the distribution rights in its key market.
What will CareDx do with all that cash? The company says the proceeds will support long-term growth initiatives, including potential acquisitions that fit its Precision Diagnostics Solutions model. They also hinted that shareholder returns "could be considered." Translation: buybacks or dividends might be in the cards, but growth investments come first.
The strategic shift looks well-timed based on the preliminary numbers. CareDx reported Q1 2026 revenue of approximately $118 million, up 39% year-over-year. Testing Services brought in about $91 million, Patient and Digital Solutions contributed $16 million, and the soon-to-be-sold Lab Products unit accounted for that $10 million. Testing volume reached roughly 54,900, up 17%, with average revenue per test at approximately $1,660. The company ended the quarter with about $198 million in cash and marketable securities and plans to give full guidance during its earnings call on April 28.
Investors seem to like the plan. CareDx shares were up 28.54% at $22.59 at the time of publication on Thursday. Sometimes, selling a business isn’t a sign of weakness; it’s just a way to clear the deck for what you do best.
