Quest to acquire PathAI Diagnostics, accelerating AI and digital pathology adoption in cancer diagnosis

Secaucus-based Quest Diagnostics on Wednesday said it will acquire Boston-based PathAI‘s PathAI Diagnostics unit, a provider of artificial intelligence-powered technology for pathology.

At closing, PathAI Diagnostics’ digitized laboratory in Memphis, Tennessee, will become Quest’s AI and digital research & development and solutions center.

PathAI will continue to support its biopharmaceutical clients with end-to-end clinical trial services capabilities at its biopharma lab, which is separate and distinct from the diagnostic laboratory business.

The transaction is expected to be completed in the second quarter.

“This transaction will enable Quest to dramatically ramp our capabilities in AI and digital pathology, building on our leadership in oncology and subspecialized pathology services,” Kristie Dolan, senior vice president, oncology, Quest Diagnostics, said. “AI and digital technologies have tremendous potential to improve cancer care, and Quest has the know-how to scale and deliver innovations that are high quality, efficient and broadly accessible.”

“At Quest Diagnostics, we are committed to maximizing patient impact from every precious sample,” Mark Gardner, senior vice president, molecular genomics and oncology, Quest Diagnostics, said. “The relationship with PathAI and acquisition of PathAI Diagnostics will enable us to rapidly accelerate the adoption of digitization and artificial intelligence for our market-leading pathology offering and will therefore strengthen our capability to serve patients across the entire continuum of oncology care, from diagnosis, to prognosis, to therapy selection and patient monitoring.”

The next phase in cancer innovation will be unlocked by digital pathology. Digital pathology enables the creation of digital images of glass slides that can be securely shared electronically with other pathologists to view, reducing transportation needs and speeding testing and results reporting. It also has the advantage of extending access to expert consults to geographic areas where pathologists are in short supply, such as in parts of rural America and internationally. It may also help alleviate workforce pressures due to a shortage of pathologists and histotechnologists, the skilled laboratory professionals who prepare tissue slides.

“Digital pathology will strengthen our ability to offer flexible solutions that fulfill the needs of today’s hospital laboratories. For instance, many hospital labs are facing a shortage of histotechs. With digital pathology, these labs can refer slide preparation to us while continuing to perform professional interpretation in-house,” Dolan added. “Digital pathology will also allow us to extend the interpretative expertise of our roughly 400 pathologists to hospitals and other labs who lack these skilled professionals on-staff, regardless of location.”

Quest has a long history of strategic AI and automation deployment. The company has implemented AI, digital and automation technologies across several laboratory and business functions, from microbiology and cytogenetics to specimen processing and customer service, improving quality, efficiency and customer and employee experiences.

The transaction builds on Quest’s deep expertise and scale in cancer, with approximately 400 pathologists serving top health systems in the U.S. In recent years, Quest has piloted digital and AI pathology oncology solutions at Quest and AmeriPath sites in Clifton, Tampa, Florida, and Denver.

Over time, Quest expects the transaction with PathAI will enable it to deploy flexible digital slide preparation and diagnostic and second opinion consultation services to health systems and other providers, both in the U.S. and, through its Global Diagnostic Network, overseas.