Guess which ASX healthcare share is rocketing 90% on a new deal with Sonic?

The Microba Pty Ltd (ASX: MAP) share price is having a stunning day.

In morning trade, the precision microbiome company’s shares were up as much as 91% to 42 cents.

The Microba share price has pulled back since then but remains up 45% at 32 cents at the time of writing.

Why is this ASX healthcare share smashing the market?

Investors have been scrambling to buy this healthcare share after it announced a major deal with Sonic Healthcare Limited (ASX: SHL).

According to the release, Sonic has agreed to invest $17.8 million to acquire a 19.99% shareholding in Microba at 26 cents per share. In addition, the healthcare giant is seeking to acquire options for an additional 5% equity position, subject to shareholder approval. Exercise of these options would result in a further investment of $7.5 million in Microba.

Why is Sonic investing in Microba?

The release notes that Sonic and Microba have agreed initial terms of a strategic alliance to exclusively deliver Microba’s microbiome testing technology into Germany, the United Kingdom, and Belgium, along with non-exclusive distribution into Sonic’s broader network including Australia, Switzerland, the United States and New Zealand.

Microba’s “world-leading technology” is used for measuring the human gut microbiome, supporting the discovery and development of novel therapeutics for major chronic diseases and delivering gut microbiome testing services globally.

Sonic Healthcare’s CEO, Dr Colin Goldschmidt, commented:

Sonic Healthcare prides itself on delivering accurate, reliable medical diagnostics services using leading laboratory and informatics technologies. Our partnership with Microba exemplifies our commitment to invest in cutting edge developments in laboratory medicine.

We see microbiome testing becoming a key part of pathology over coming years and are excited about the potential of this partnership and the opportunities that Microba’s technology will provide for Sonic’s global operations, our referring clinicians, and our patients.

The post Guess which ASX healthcare share is rocketing 90% on a new deal with Sonic? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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