NEW YORK (GenomeWeb News) – A Bankruptcy Court today approved Correlogic System's motion to "reject" licenses the molecular diagnostics firm had with Quest Diagnostics and Laboratory Corporation of America as part of its Chapter 11 reorganization.
The Germantown, Md., company filed for Chapter 11 protection in the summer in the hopes of securing funding for its OvaCheck ovarian cancer diagnostic test. As part of the filing, Correlogic asked the court to allow it to reject licensing agreements it had forged with Quest and with LabCorp in 2002.
At the time of its Chapter 11 filing, Correlogic CEO Peter Levine said when the agreements were reached OvaCheck was a mass spectrometer-based test. But after the company moved the test to an immunoassay platform, confusion over whether the agreements covered the test in its new format "made it difficult for us to obtain additional funding."
Quest and LabCorp responded to Correlogic's request by asking the US Bankruptcy Court in the District of Maryland, where Correlogic petitioned for Chapter 11 protection, to deny the company's motion.
As GenomeWeb Daily News' sister publication ProteoMonitor reported last month, Quest cited parts of its agreement with Correlogic saying that it "provides that any additional technology (as defined in the license and development agreement) created, owned, licensed, controlled, or otherwise possessed by debtor which provides additional utility relative to ovarian cancer testing shall become licensed technology."
Quest added that its relationship with Correlogic had not hindered Correlogic's fundraising capabilities, but instead gives it "or any purchaser of the licensed technology ready access to the marketplace, a fact that can be expected to be attractive to any prospective investor or purchaser."
Its argument did not sway the court, which sided with Correlogic.