Quest Diagnostics has signed a multi-faceted collaboration agreement to acquire select assets of PathAI Diagnostics, a division of PathAI focused on providing anatomic and digital pathology laboratory services.

Under the agreement, Quest Diagnostics will make PathAI Diagnostics’ digitised laboratory in Memphis, Tennessee as its artificial intelligence (AI) and digital research and development and solutions centre.

This will support Quest Diagnostics’ speciality pathology divisions, AmeriPath and Dermpath Diagnostics.

PathAI will continue focusing on assisting biopharmaceutical clients with end-to-end clinical trial services through its separate biopharma lab, which is distinct from its diagnostic laboratory operations.

The transaction is anticipated to be finalised in Q2 2024.

Additionally, Quest Diagnostics has secured licence for PathAI’s AISight digital pathology image management system to support its pathology laboratories and client sites across the US.

The two companies may also explore opportunities for Quest Diagnostics to help in the development of PathAI’s algorithm product by using the former’s pathology expertise.

Furthermore, Quest Diagnostics will serve as a preferred provider for the biopharmaceutical clinical laboratory services of PathAI.

Quest Diagnostics oncology senior vice president Kristie Dolan said: “This transaction will enable Quest to dramatically ramp our capabilities in AI and digital pathology, building on our leadership in oncology and subspecialised pathology services.

“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.”

The collaboration is intended to expedite the adoption of digital and AI pathology innovations to boost quality, speed, and efficiency and reduce costs in cancer diagnosis.

In the future, the partnership will provide flexible digital slide preparation, diagnostic services, and second opinion consultations to healthcare providers in the US and globally through Quest Diagnostics’ global diagnostic network.

The acquisition of assets will also extend Quest Diagnostics’ range of anatomic pathology services to include dermatopathology, gastrointestinal, and urological diseases.

PathAI co-founder and CEO Andy Beck said: “The adoption of these technologies by an organisation with the scale and breadth of capabilities of Quest is a clear demonstration of how PathAI’s cutting-edge solutions can help address the market’s need for more efficient and high-quality pathology operations.

“The PathAI Diagnostics laboratory in Memphis will allow Quest to accelerate its digital journey with an already digitised laboratory.”