NEW YORK (GenomeWeb News) – Sequenom said today that it plans to buy the Center for Molecular Medicine, a Grand Rapids, Mich.-based Clinical Laboratory Improvement
Act-certified diagnostics lab, in an agreement worth roughly $4 million.
CMM is a joint venture that was created last March between Spectrum Health, a non-profit health system, and the Van Andel Research Institute, an independent research institute. It includes Spectrum Health’s clinical resources and the Van Andel Research Institute’s genomics, proteomics, and bioinformatics know-how. CMM currently provides DNA and RNA extraction, DNA microarrays, multiplex detection, gene expression profiling, and other diagnostic services.
Under the terms of the agreement, Sequenom will acquire CMM for approximately $4 million, of which 90 percent will be paid in common stock. Sequenom said that it also received a tax incentive package valued at up to $20 million over 12 years. The company will also conduct collaborative research projects with Spectrum Health and Van Andel as part of the agreement.
"This acquisition positions us well to successfully launch our SEQureDx Trisomy 21 Down syndrome test through a CLIA-certified lab on schedule during the first half of 2009,” Sequenom CEO Harry Stylii said in a statement.
Stylli noted during Sequenom's second-quarter conference call in July that the firm planned to build or acquire a CLIA lab to support the commercialization of its tests.
The company said today that acquisition of CMM’s CLIA-certified lab will give it control over “all aspects of the commercialization of its SEQureDx technology, including marketing and communication programs, and critical sales and third-party payer reimbursement contracting strategies.”
Sequenom said it also plans to open a CLIA-certified lab in its hometown of San Diego, Calif., that will be serviced by the CMM laboratory.
Under the terms of the agreement, Spectrum Health will continue to coordinate third-party payer agreements, will provide the IT interface between CMM and Spectrum Health, and will provide additional state licensor certifications and operations support. The agreement also calls for Sequenom to work with Van Andel in a research collaboration focused on technology development, women’s health, and oncology.
Stylii said CMM’s molecular diagnostic experience and relationship with Spectrum Health, as well as Van Andel’s genomic and translational research capabilities, “will be valuable and complementary additions to Sequenom.”
In particular, he noted that Spectrum Health, one of the largest healthcare providers in US with more than 140 service sites and approximately 8,000 births each year, “should be invaluable as we expedite prospective clinical validation studies for our Trisomy 21 test as part of our market development plan.”
CMM’s executive director, Daniel Farkas, will remain at his post at the lab and will join Sequenom’s management team.