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In Brief This Week: Quest Diagnostics; PDI; Med BioGene; Cancer Genetics

NEW YORK (GenomeWeb News) – Quest Diagnostics this week said that its board has approved a quarterly dividend and increased the firm's share repurchase authorization by $1.0 billion.

The company will pay a quarterly cash dividend of $.30 per share payable on Oct. 16 to shareholders of record on Oct. 1. Also, as a result of the increase to the share buyback program, Quest's total repurchase authorization is about $1.3 billion. Company President and CEO Steve Rusckowski said in a statement that Quest intends to use the $300 million in net proceeds from the company's recent sale of the ibrutinib royalty rights in order to repurchase the company's stock as part of the buyback program.

PDI signed an agreement with an undisclosed company to commercialize the unnamed company's molecular diagnostic tests for an undisclosed disease focus. PDI said that it paid the company an initial fee of $1.5 million and received an option to purchase the firm. The option price is dependent on certain milestones being achieved during the collaboration period. The maximum option price is $6 million.

If all milestones are achieved within one year and PDI has not exercised its option, the company can require PDI to exercise the option to buy the company, PDI said, or terminate the collaboration agreement and pay PDI a $2 million fee. If PDI acquires the company, PDI would pay, in addition to the option price, a royalty of 7 percent on annual net revenue up to $50 million with escalating royalty percentages for higher annual net revenue capped at 11 percent for revenues greater than $100 million.

During the collaboration period, the two companies will pilot various sales and marketing programs and build additional supportive sales and marketing materials. The unnamed company is based in the US and holds two technology licenses which form the basis of their molecular diagnostics tests. It also has a joint venture agreement with a CLIA approved laboratory. It has no revenue currently, PDI said.

Med BioGene said that a petition filed by certain dissident shareholders against the Vancouver, British Columbia firm will be heard by the British Columbia Supreme Court on Aug. 30. The shareholders filed a petition that made claims against Med BioGene related to the adoption of the advance notice policy by the company's board in advance of the annual and special meeting of shareholders on May 17; Med BioGene's rejection, "for failure to comply with the requirements of the advance notice policy," of a notice filed by one of the petitioners nominating himself and another person at the meeting as directors of the company; and decisions made by Med BioGene's chairman at the meeting.

The petitioners are asking the court to grant an order for a new annual meeting of Med BioGene and the allowance of the dissident shareholders to nominate persons for election to the company's board.

Cancer Genetics closed on the public offering of 1.5 million shares of its common stock at $10 per share, raising $15 million in gross proceeds. The Rutherford, N.J.-based firm granted the underwriters a 45-day option to purchase up to 225,000 additional shares of common stock to cover any overallotments. Aegis was the sole book-running manager for the offering, while Feltl & Co. was co-lead manager. Cancer Genetics recently moved to the Nasdaq market.

In Brief This Week is a Friday column containing news items that our readers may have missed during the week.