NEW YORK, July 22 (GenomeWeb News) - Quest Diagnostics has purchased a 17-percent stake in Ciphergen Biosystems as part of a strategic alliance to develop and commercialize proteomic diagnostic tests based on Ciphergen's SELDI ProteinChip technology, the companies announced today.
News of the agreement, which Ciphergen promised earlier this month, drove Ciphergen shares up nearly 15 percent, to $2.23, in mid-day trading.
Quest purchased 6.2 million shares Ciphergen's common stock, and has a five-year warrant to purchase an additional 2.2 million shares at $3.50 per share, for an aggregate price of $15 million, Ciphergen said.
Quest has also agreed to loan Ciphergen up to $10 million to fund certain development activities. The loan would be forgiven based on achieving certain milestones, the companies said.
According to the terms of the alliance, the companies will focus on commercialization of "selected assays" chosen from Ciphergen's pipeline over the next three years.
Additional terms of the agreement were not disclosed.
Quest's stake in Ciphergen is not its first investment in a proteomics diagnostic firm. Last month, the diagnostic company made an equity investment in privately held Correlogic systems.
The amount of that investment was not provided.