ProPhase Labs is actively seeking a sale or strategic partnership for its BE‑Smart esophageal cancer risk‑stratification test, a CLIA‑certified, CAP‑accredited laboratory‑developed test that has been validated in a Mayo Clinic pilot study and published in the Journal of Clinical Gastroenterology and Hepatology. The company has reached out to more than 70 potential acquirers and partners, targeting firms that can accelerate commercialization and bring the test to the approximately 7 million upper‑endoscopies performed annually in the United States for GERD and Barrett’s surveillance, a market that could generate up to $14 billion in annual revenue.
The BE‑Smart test uses a multiplex proteomic assay with quantitative mass spectrometry and boasts a technical success rate above 95 % on esophageal brush cytology samples. By divesting the test, ProPhase aims to generate immediate liquidity while preserving the opportunity for future royalty or revenue‑sharing arrangements, thereby reducing development and commercialization costs and freeing capital for other growth initiatives.
In parallel, ProPhase’s Crown Medical Collections initiative is progressing well. More than 60 % of the recovered COVID‑19 testing claims come from commercial payers that partially reimbursed claims, a mix that strengthens the recovery profile and can lead to quicker settlements. The company has recovered over $50 million in net claims to date and is engaged with 250 insurance payors, with 50 matters in advanced settlement posture. The under‑payment mix is expected to improve the likelihood of successful recoveries compared to outright denials.
CEO Ted Karkus said the dual strategy will provide immediate cash and position the company for long‑term value creation. He added that the Nebula Genomics/DNA Complete business is performing ahead of internal expectations, underscoring ProPhase’s broader focus on genomics and AI‑driven diagnostics. The liquidity generated from the BE‑Smart sale and the accelerated collections are expected to strengthen the balance sheet, reduce debt, and create a foundation for future investments in AI initiatives such as Project ZenQ‑AI.
The move signals a strategic pivot toward monetizing high‑potential assets while tightening the company’s financial footing. By selling a test with a sizable addressable market and accelerating cash flow from collections, ProPhase is positioning itself to invest in next‑generation diagnostics and to pursue growth opportunities without the burden of ongoing development costs.
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