Federal Court Says Insurance Firm Must Pay CombiMatrix $35.7M Award
The US District Court for the Central District of California has entered a final judgment in favor of CombiMatrix for $35.7 million, to be paid by the National Union Fire Insurance Company, CombiMatrix said last week.
In February, the court sided with CombiMatrix in its suit against National Union, which claimed that the insurance firm had refused to defend and indemnify CombiMatrix under its director and officer’s insurance policy (see BAN 3/11/2008).
On April 23, the court awarded CombiMatrix an additional $3.6 million in attorneys' fees and litigation costs, increasing the overall award to $35.7 million.
This award was entered as a final judgment on May 22.
CombiMatrix said in a statement that it “will take all reasonable efforts to collect this award, including interest, from National Union.”
Separately, the firm last week registered with the US Securities and Exchange Commission to sell up to 2,305,274 shares upon the exercise of outstanding warrants.
The company said in its SEC filing that if all of the warrants are exercised, it will net up to $19,510,926 before deducting around $17,500 in expenses.
CombiMatrix said it intends to use the proceeds for working capital, research and development, general and administrative expenses, and sales and marketing activities.
The outstanding warrants described in the filing include warrants to purchase 159,648 shares for $24.00 per share, issued September 2005; warrants to purchase 1,129,894 and 48,842 shares for $8.70 and $10.88 per share, respectively, issued December 2006; and warrants to purchase 966,890 shares for $5.50 per share, issued May 2007.
The filing follows the company’s disclosure last week that it had $5.5 million in cash as of March 31 and that it would need to secure additional financing in order to continue operating as a going concern beyond September.
CombiMatrix said in a statement last week that it needs to “obtain capital from external sources, increase revenues and reduce operating costs” and that it is also “evaluating a number of opportunities to increase our cash reserves.”
SRL Ranbaxy to Market DiaGenic's Breast Cancer Dx in India
Norwegian diagnostics developer DiaGenic said last week that it has signed up SRL Ranbaxy to market its genomic breast cancer test in India.
SRL Ranbaxy is a clinical reference pathology lab network with 40 labs and around 750 collection centers in India.
DiaGenic said it conducted a study of its blood-based gene expression test in India that showed it was not affected by variations in ethnicity or by the menopausal state of the patient.
The gene set DiaGenic uses for the test was identified in Scandinavian and US cohorts, and the results of the Indian clinical study support “widespread use” of the test to diagnose breast cancer at an early stage, the company said.
DiaGenic added that the gene set showed the same predictive and diagnostic potential in the Indian population as it did in the Scandinavian and US populations.
All of the laboratory services under the agreement will be undertaken in India and will be provided by LabIndia Instruments, and they will be accessible at SRL Ranbaxy’s labs and collection centers.
Breast cancer is the second leading cause of death for Indian women, and resulted in nearly 100,000 deaths in India last year, DiaGenic said, adding that the central cause of the high mortality rate is that only around 10 percent of breast cancer cases in India are discovered in the early stage when it is easier to treat.
Nanogen to Consolidate POC Manufacturing Operations in San Diego, Transfer Listing to Nasdaq Capital Market
In a move to reduce costs, Nanogen said last week that it plans to transfer its Toronto, Canada, point-of-care manufacturing operations to its San Diego facility and to cease all manufacturing operations in Canada by the end of the year.
Nanogen said it expects to lay off around 30 people as part of the transition, and that the consolidation should enable it to reduce its overall costs by approximately $3 million beginning in 2009. As of Dec. 31, 2007, Nanogen had 248 employees.
Separately, the company announced that it has received approval to transfer its stock from the Nasdaq Global Market to the Nasdaq Capital Market, effective this week. Nanogen's trading symbol will remain "NGEN."
The listing transfer is in response to a delisting warning Nanogen received last November regarding its non-compliance with Nasdaq’s minimum bid price requirement of $1.00 per share. Nanogen said today that once its shares are transferred to the Nasdaq Capital Market, it will have an additional 180 days from the original May 27 deadline, or until the end of November, to regain compliance with the $1.00-per-share listing requirement. The company’s shares were trading at $0.35 as of midday on Tuesday.
Regarding the transfer of its point-of-care manufacturing operations, Nanogen said the move to San Diego will take place over “the next several months” and that it does not expect the transition to affect customers.
The Toronto facility manufactures qualitative cardiac products that Nanogen purchased from Spectral Diagnostics in 2006.
Those operations will now be consolidated with the company’s immunoassay manufacturing activities in San Diego, which the company said will enable it to reduce costs and focus its resources on next-generation platform and products.
"The decision to consolidate these operations is driven by our commitment to improving profitability and reaching positive operating cash flow," said David Ludvigson, Nanogen's president and COO, in a statement.
"R&D and manufacturing will now be in the same facility and will be more closely aligned as we develop our future rapid testing products," he said.
The move follows a restructuring plan that Nanogen initiated last year, which involved closing its microarray business and laying off around 20 percent of its staff with the goal of focusing its business on its real-time PCR and point-of-care testing units (see BAN 11/20/2007).
Earlier this month, in a conference call to discuss the company’s first-quarter financial results, Nanogen CEO Howard Birndorf said that the restructuring plan has “substantially improved” the company’s financial performance, but noted that Nanogen “will require additional financing to reach profitability.”