NEW YORK (GenomeWeb News) – Response Genetics today announced it has acquired the "key assets" of Pathwork Diagnostics, including its US Food and Drug Administration-cleared and Medicare-reimbursed test for diagnosing metastatic, poorly differentiated, and undifferentiated cancer.
In a document filed with the US Securities and Exchange Commission, Response said it will pay up to $1.35 million for the Pathwork assets, including a $200,000 cash payment and issuance of 500,000 shares of Response's stock with a lock-up period through June 2014.
The deal is anticipated to be accretive to Response within the first year of the acquisition, the Los Angeles-based molecular diagnostics firm said.
Pathwork Diagnostics went out of business in April, as Pharmacogenomics Reporter previously reported, seven years after it was formed when Predicant Biosciences bought Pathwork Informatics and merged the two companies. Its lead product was a microarray-based gene expression test called the Tissue of Origin test, which used proprietary algorithms to measure the gene expression of 2,000 genes.
According to Response, the test generated sales in the mid-seven figure range in 2012.
In a statement, Response Chairman and CEO Thomas Bologna said the test "reduces the time to diagnosis and increases physicians' probability of reaching a definitive diagnosis, a necessary step in therapy selection" adding that reducing the waiting time before treatment "maximizes patient outcomes."
The deal is line with his firm's "goal to rapidly grow Response Genetics both organically and through a series of acquisitions," he said. "Acquiring the assets of Pathwork Diagnostics adds proprietary, Medicare reimbursed content that we believe addresses the needs of both pathologists and oncologists, further expands both our technology and testing base, leverages our current infrastructure well and most importantly adds to the top-line growth of our [diagnostics] business."