NEW YORK (GenomeWeb News) – Clinical Data today said that it has entered into a definitive agreement to acquire Avalon Pharmaceuticals for $10 million, providing Clinical Data with a pipeline of oncology biomarkers and a biomarker discovery platform that will be used to identify diagnostic and therapeutic candidates.
Newton, Mass.-based Clinical Data will issue stock to Avalon’s shareholders based on a 15-day volume weighted average price of $12.49 per common share. Clinical Data also will issue to Avalon’s shareholders up to $2.5 million of additional shares of Clinical Data’s common stock if certain milestone payments are met under Avalon’s collaborations with Merck and the Novartis Institute for Biomedical Research prior to June 30, 2010.
Avalon’s board has approved the deal, which must also receive the approval of Avalon’s shareholders.
The merger pact was part of a series of four agreements between the companies, which included a private placement, a secured term loan agreement, and an exclusive license to Avalon’s drug and biomarker discovery platform.
Drew Fromkin, president and CEO of Clinical Data, said in a statement that Avalon’s “extensive library of biomarkers and compounds, and oncology expertise, add to our growing estate of proprietary oncology biomarkers and in-depth knowledge of biomarker and pharmacogenetic test development.”
In early Tuesday trade on the Nasdaq, Clinical Data’s shares were down .2 percent at $10.79, while shares of Avalon were up 200 percent at $.24 per share.