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Transgenomic Inc. acquires Clinical Data’s diagnostic unit
OMAHA, Neb.—Explaining that the sale of its "non-core diagnostic business was the final piece in our transition to a drug development program with a new drug now under review at FDA, plus others in stage III and stage II trials," according to a company spokesperson, Clinical Data Inc. has signed a definitive agreement to transfer its diagnostic business to Transgenomic Inc.
The acquisition includes a suite of proprietary genetic commercial tests, certain proprietary biomarker assays and the CLIA-certified laboratory operations of Clinical Data for a purchase price of approximately $15.4 million, primarily in cash and notes. Closing of the transaction is subject to customary regulatory approvals and closing conditions.
Craig Tuttle, Transgenomic's CEO, considers the deal a significant transaction for the company.
"It brings us a well-established and growing molecular diagnostic business, a substantial and established revenue base and validated new biomarker assays, along with a talented diagnostic team," he says. "Importantly, the acquisition provides us with multiple growth opportunities through continued growth of the 11 test FAMILION product portfolio of molecular assays for inherited cardiac disorders, plus several proprietary assays for testing patients' response to important cancer treatments and patients' drug metabolism of a variety of drugs. This acquisition will significantly improve our competitive position and enhance our customer support and patient care capabilities. We look forward to completing this acquisition and integrating these assets into Transgenomic as quickly as possible. "
The fit looks right, since Transgenomic develops and markets a number of molecular diagnostic tests and services for oncology, cardiology, hematology, inherited disorders and diseases of aging. These include the WAVE System and associated consumables specifically designed for use in genetic variation detection and single- and double-strand DNA/RNA analysis and purification. More than 1,450 systems have been shipped to customers in more than 50 countries, the company states. The SURVEYOR Mutation Detection Kits and SURVEYOR Check-It Kit provide reagents and protocols for high-sensitivity detection of mutations in DNA.
"Clinical Data has built the commercial, managed care and CLIA-certified laboratory infrastructure and capabilities to support its currently marketed tests including the FAMILION family of genetic tests for inherited heart diseases and PGxPredic tests for predicting drug response," Tuttle notes.
The diagnostic business includes the FAMILION family of 11 commercialized proprietary tests; contracts with private and government health insurers for test reimbursement, with coverage policies that offer access to genetic testing for an estimated 280 million patients; established academic and medical society guidelines, as well as the Heart Failure Society of America guidelines, including genetic testing that can be identified by FAMILION tests which detect genetic mutations that cause cardiac channelopathies or cardiomyopathies; pipeline opportunities that include the Fc gamma receptor family of oncology tests and a clopidogrel response test; marketing resources; testing and customer service capabilities; intellectual property and rights; a state-of-the art facility; and equipment.
The purchase price of $15.4 million consists of $6 million in cash, $8.5 million in a three-year note issued to Clinical Data bearing interest of 10 percent per annum with a principal repayment schedule beginning in May 2012, and a second note of $932,000 for facility improvements made to the CLIA-certified laboratory at 6.5 percent interest for a 12-month period.
Additionally, following the closing of the transaction, Clinical Data will be entitled to receive milestone payments upon the successful development and commercialization of multiple new products, royalty payments based on certain reimbursements received by the company in connection with the performance of certain biomarker assays, a percentage of certain account receivables collected during the 18-month period following the closing and a percentage of the aggregate proceeds received by the company in connection with certain transfers of certain biomarker assay technology.