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Rosetta offloads PDx for $2.875M
PHILADELPHIA & REHOVOT, Israel—In keeping with the changing of the seasons, genomic diagnostics company Rosetta Genomics Ltd. is making some changes of its own with the early September announcement that it will be selling Cynogen Inc. (d/b/a PersonalizeDx [PDx]). Rosetta has inked a definitive agreement under which it will be selling the entirety of its ownership interest in PDx to Pragmin Prognosis Inc., a business group that offers clinical diagnostics solutions, for $2.875 million in cash. A $1.25-million installment of that total is due at closing, with the balance to be made over the course of set time intervals.
PDx, a molecular diagnostics and services company, provides community-based pathologists, urologists and oncologists with tests for a number of cancers, including bladder, prostate, lung, breast and hematological malignancies. These tests are made available through a CLIA laboratory in Lake Forest, Calif.
‘‘We continue to focus our commercial efforts on our RosettaGX Reveal (Reveal) assay for classifying indeterminate thyroid nodules (ITNs) and believe now is the right time to divest the PDx business in order to further invest in our commercial efforts for Reveal, which continues to make inroads in the very attractive market for classifying ITNs,’’ Kenneth A. Berlin, president and CEO of Rosetta Genomics, said in a press release. ‘‘This divestiture will provide us with non-dilutive cash and allows us to reduce operating expenses in order to permit the Rosetta organization to truly focus on our leading Reveal test.”
Rosetta Genomics first acquired Cynogen in 2015, when it bought the firm from Prelude Corp., a Fjord Ventures portfolio company. The purchase price was $2 million, as well as 500,000 ordinary shares of Rosetta Genomics, some specified assets and certain services to be provided by Rosetta Genomics to Prelude. The purchase also secured Rosetta Genomics the rights to market Prelude’s novel assay for ductal carcinoma in situ.
A key motivator for Rosetta’s divestiture of PDx is the company’s RosettaGX Reveal assay; promising data from recent studies has likely boosted Rosetta’s decision to focus its resources on advancing the assay and trying to secure the market advantage it could offer. Reveal, a microRNA-based diagnostic assay, assesses cytologically indeterminate thyroid nodules to determine whether they are benign or malignant. Current diagnosis largely depends upon fine needle aspiration (FNA) samples, but as 15 to 30 percent of those samples qualify as indeterminate, a more certain testing method could offer greater surety as to the status of biopsied nodules. In fact, Rosetta claims that its Reveal assay “can help prevent over 75 percent of unnecessary surgeries for patients with initial indeterminate results.”
The company presented in May of this year new data that demonstrated the accuracy of its RosettaGX Reveal. The data were presented at the American Association of Clinical Endocrinologists 26th Annual Scientific and Clinical Congress. The abstract presented at the Congress was titled “Validity of RosettaGX Reveal for the Accurate Diagnosis of Pre-Operative Medullary Thyroid Carcinoma Utilizing FNA Smear,” and the data detail how Reveal performs in a clinical setting in terms of diagnosing medullary thyroid carcinoma (MTC) and the benefits of the assay for this use.
As noted by the study authors, “RosettaGX Reveal can accurately detect medullary carcinoma using stained FNA smears or ThinPrep samples, even in cytologically indeterminate samples. The Reveal assay is suggested in patients with an indeterminate cytology diagnosis and can play a valuable role in the detection of MTC, and hopefully, provide for more favorable outcome for patients.”
In a more recent presentation, Rosetta shared data last month at the 87th Annual Meeting of the American Thyroid Association regarding Reveal in a pair of posters. In an independently conducted comparison study, Reveal was shown to be more specific than Veracyte Inc.’s Afirma, the current market leader, which could prevent unneeded surgeries for patients who had unclear thyroid cytologies.