NEW YORK (GenomeWeb) – Cantor Fitzgerald today upgraded shares of Rosetta Genomics to a Buy rating on the company's acquisition of PersonalizeDx.
Analyst Sung Ji Nam upgraded Rosetta's shares from a previous Hold rating and increased its price target to $5.50 per share from an earlier target of $4.
In a research note, Nam estimated the total cost of the PersonalizeDx deal at about $3.5 million, which included $2 million in cash and 500,000 shares of Rosetta's stock. She also noted that PersonalizeDx had sales of approximately $6.9 million in 2014, compared to Rosetta's sales of $1.3 million last year, and said that PersonalizeDx expands Rosetta's laboratory capacity. PersonalizeDx has about 29,000 square feet of lab space, compared to Rosetta's 6,000 square feet.
PersonalizeDx "not only provides immediate scale to [Rosetta's] business, but brings top-line growth momentum," Nam said, adding that the price of the transaction compares favorably with other recent, similar deals, such as Cancer Genetics' buy of Gentris for up to $6.25 million, and NeoGenomics' $6 million acquisition of Path Labs.
Nam said that outside of PersonalizeDx, Rosetta has been building its scale through partnerships, such as a deal with Admera Health that includes pharmacogenomic, EGFR, and KRAS testing, and another with Precipio Diagnostics for blood malignancies. Lastly, she noted that Rosetta is also developing risk stratification tests for bladder cancer and endometrial cancer, with anticipated launches in 2016 and beyond.
In afternoon trading on the Nasdaq Rosetta's shares were up about 9 percent to $4.12.