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DRI Capital Acquires Rights to Nanogen Royalties

NEW YORK (GenomeWeb News) – DRI Capital will pay Nanogen $10 million for the rights to all future royalties under a licensing agreement between Nanogen and Applied Biosystems.
 
According to a joint announcement from the firms, DRI Capital will receive royalties related to Nanogen’s minor groove binder technology, which was licensed by ABI for use in certain TaqMan products. The MGB technology is used for the design of oligonucleotide probes.
 
“Monetizing this royalty stream provides us with a non-dilutive means of raising capital to fund our operations as we work towards achieving cash flow breakeven in late 2008,” said Howard Birndorf, chairman and CEO of San Diego-based Nanogen.
 
Earlier this month, Nanogen reported that its fourth quarter revenues had increased 13 percent, even though it had shut down its microarray business just a few months earlier. The firm also said that it expects its independent accountants to issue an adverse opinion with respect to its internal controls and say that “there is substantial doubt about the company’s ability to continue as a going concern.”
 
Nanogen had $5.8 million in cash and cash equivalents as of the end of 2007.
 
Nanogen also said last week in a filing with the US Securities and Exchange Commission that it will restate its 2007 financial statements due to adjustments in the way the firm accounts for its investment in Jurilab. It said the changes would not impact previously reported cash, short-term investments, or revenues.
 
Nanogen invested $1.5 million in the Finland-based pharmacogenomics firm in 2005 as part of an alliance to develop molecular diagnostics.

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