KUALA LUMPUR: Malaysian Genomics Resource Centre Bhd (MGRC) expects its acquisition target MPath Sdn Bhd to become its main earnings driver.
MGRC yesterday obtained shareholders’ approval to acquire the remaining 50% in MPath for RM11.5mil which will be completed by end of this month.
MGRC is principally involved in genetics and genomics research and tests while MPath is a pathology test centre through its subsidiary Clinipath which has 19 branches nationwide.
Clinipath, the fourth largest pathology services provider in Malaysia, offers a complete range of pathology services with over 1,200 medical and diagnostic and genetic screening tests.
“It is safe to say that MPath will be the group’s key earnings driver. Last year MPath recorded a revenue of more than RM20mil, which was higher than MGRC’s topline of about RM10mil.
“We have plans to widen our networks in the east coast and Sabah and Sarawak. We could set up two more labs in the east coast while for Sarawak, we are looking at strategic partnerships with existing players.
“Investment is not that significant to set up a new lab and we only expand when demand grows.
“This acquisition will also allow MGRC to accelerate the deployment of its genetic services by capitalising on Clinipath’s established distribution network and strong reputation in the healthcare industry,” said MGRC chief operating officer Sasha Nordin (pic) following the company’s EGM.
On prospects of the pathology industry in Malaysia, Sasha said the RM1bil industry still offered a lot of room for growth, expanding at 9% annually.
“The primary demand drivers for pathology services in Malaysia are the increasingly large working population, growing prevalence of chronic diseases such as stroke and diabetes as well as growing healthcare awareness.
“The barometer of this positive demand is escalating availability of medical insurance coverage and healthcare benefits for employees,” he said.
In contrast to the predominant use of pathology for sick patients, Sasha said there is a growing demand for the use of pathology testing for preventive healthcare among healthy people.
“As the market of healthy customers is larger than sick patients, the interest in preventive healthcare offers opportunities for pathology companies to provide the market with new tests especially in the area of genetic screening.
“In a mature pathology market like Australia, 60% of tests are requested for preventive care or chronic disease management,” he said.