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Cancer Genetics May Invest $6M into JV with Mayo Foundation

NEW YORK (GenomeWeb News) – Newly minted public company Cancer Genetics has disclosed that it will invest at least $2.0 million, and potentially up to $6.0 million, into a joint venture the firm formed in November 2011 with the Mayo Foundation for Medical Education and Research.

The Rutherford, NJ-based cancer molecular diagnostics company disclosed more details about the joint venture in its Form 10-Q, filed this week with the US Securities and Exchange Commission. The JV is focused on the development of oncology diagnostics based on next-generation sequencing.

According to the SEC filing, the JV is structured as a limited liability company. Cancer Genetics said it will potentially invest up to $6.0 million into the venture over a three-year period. Mayo's capital contribution into the JV will take the form of cash, staff, services, hardware and software resources, laboratory space, and instrumentation, "the fair market value of which will be approximately equal to $6 million," Cancer Genetics said.

The company, which develops DNA-based cancer diagnostic tests, also said that it may be prevented from "penetrating the [US] market" with certain of its probe-related tests due to a license to a family of patents held exclusively by Abbott Laboratories' Vysis business. The patents are "directed broadly to the usage of blocking DNA," and Cancer Genetics' probes are configured to use blocking DNA.

"Unless we obtain a license from Abbott Laboratories for use of blocking DNA or otherwise cross-license other satisfactory third-party technology, we will not be able to sell our probes in the United States until the Abbott patents expire," in 2017 CGI said.

The company added that its current business plan excludes developing US-based sales for its DNA probe products. Instead, "we are currently focused entirely on growing our DNA probe business in higher growth emerging markets and select European markets," it said in its Form 10-K.

This week the company said that first-quarter revenues rose 45 percent year over year. It went public last month.