Exact Sciences' Asset Sale to Genzyme to Bring in $24.5M; Ends Sequenom's Bid
Exact Sciences said this week that it has sold to Genzyme certain intellectual property assets related to the fields of prenatal and reproductive health in a deal that is expected to provide the firm with a cash infusion of $24.5 million.
In addition, the Marlborough, Mass.-based firm has sold to Genzyme 3 million shares of its common stock.
Under the agreement, Exact retains exclusive worldwide rights to its colorectal cancer screening and stool-based DNA testing intellectual property. It also will receive a share of Genzyme's sublicensing income derived from the purchased intellectual property outside the fields of prenatal and reproductive health.
The agreement with Genzyme ends Sequenom's bid to acquire Exact Sciences for around $41 million, which it announced on Jan. 12.
Earlier this week, Sequenom commenced a hostile takeover bid for Exact, offering Exact shareholders $1.50 in Sequenom stock for each share of Exact held. However, following Exact's announcement of the deal with Genzyme, Sequenom terminated the offer.
The deal with Genzyme calls for Exact to receive $16.65 million at the closing of the transaction, with an additional $1.85 million coming over the next 18 months, contingent upon the "non-occurrence of certain events" in exchange for the sale and license of certain of Exact's assets. The firms did not specify the "certain events" cited in the statement.
Genzyme also agreed to purchase 3 million of Exact shares for $2 per share, a 127 percent premium over Exact's 30-day average closing price as of market close on Jan. 26.
Exact and Genzyme also amended their licensing deal from March 1999, giving Exact additional rights necessary to distribute Food and Drug Administration-cleared kits for stool-based detection of disease and colorectal cancer screening based on the detection of APC and P53 mutations. The amended license and assumption by Genzyme of certain patent costs will reduce Exact's cash outlays going forward, the firm said.
Shares of cash-strapped Exact were moved from the Nasdaq Global Market to the Nasdaq Capital Market in late November 2008, because its shares failed to meet certain listing requirements. That move followed a letter sent to the firm from Nasdaq on July 10, informing Exact that the value of its listed securities was below the minimum $50 million required for continued listing on the market.
The firm now believes that it has enough cash to fund operations into 2011.
"In addition to the substantial infusion of capital into Exact, we believe that our ability to access Genzyme's extensive development and regulatory expertise will facilitate our efforts toward the introduction of our next-generation platform for colorectal cancer screening," Exact President and CEO Jeffrey Luber said in a statement.
In connection with the Genzyme alliance, Luber has agreed to work with the firm's board of directors to find a new CEO who has product and commercial development expertise that is aligned with Exact's next phase of growth. Luber will remain in his current post until the new CEO is hired.
Sequenom to Acquire MDx Assets from SensiGen for $8.7M
Sequenom said this week that it has signed an agreement to acquire SensiGen's portfolio of AttoSense genetic tests, as well as certain other assets, for $8.7 million in cash and stock.
Under the terms of the agreement, Sequenom will acquire all of SensiGen's currently developed assays, including the AttoSense HPV-G and HPV-Q tests for cervical cancer, AttoSense HPV-C for head and neck cancer, the AttoSense Kidney Test, and the EpiSense Lupus Panel, along with certain other assets and intellectual property rights.
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The total purchase price of $8.7 million includes future earn-out milestone payments, Sequenom said.
Sequenom has been collaborating since 2007 with the privately held firm on the development of assays that run on its MassArray platform. Last year, as part of an expansion of that agreement, Sequenom gained the right to a minority equity interest in SensiGen.
Harry Stylli, president and CEO of Sequenom, said in a statement that the addition of SensiGen's AttoSense tests is a "key step" toward the company's goal of building its portfolio of diagnostics for women's health and cancer.
Stylli said that the company plans to market the AttoSense tests "in the near term" as laboratory developed tests through the Sequenom Center for Molecular Medicine, a CLIA-certified lab in Grand Rapids, Mich., that it acquired in November.
Longer term, Stylli said, the company would consider selling the tests as in vitro diagnostics.
Sequenom's ability to offer the tests directly to healthcare providers "could allow for significantly broader and more rapid commercialization than we could achieve on our own," said Shawn Marcell, president and CEO of SensiGen, in a statement.
Stylli noted that although Sequenom views the AttoSense tests as "a future growth opportunity," the company "remains keenly focused on the noninvasive prenatal diagnostic franchise and in particular our Down syndrome technology. As such, the cost of further development of the AttoSense assays will be immaterial to our overall R&D spend."
Novartis to Help Fund Development of Gen-Probe MDx Platform
As part of an expanded agreement between the firms, drug maker Novartis has agreed to help fund development of Gen-Probe's new automated molecular testing platform, Panther, for the blood screening market.
The partners have collaborated since 1998 on nucleic acid tests and instruments for the blood screening market. Under the expanded pact announced this week, the firms intend to continue collaborating until the year 2025, and they expect to collaborate on the development of pharmacogenomic tests.
In addition, terms of their previous agreement have been amended. Gen-Probe will continue to be primarily responsible for R&D and manufacturing and Novartis will continue to be responsible for sales and marketing. However, the firms will collaborate more closely on sales, marketing, and distribution strategies. While the partners will share R&D costs, they also will share manufacturing costs.
Gen-Probe also will receive a percentage of end-user revenues that escalate gradually from 2009 until 2015 and will remain constant thereafter.
Another addition to their collaboration is an agreement to evaluate Gen-Probe's technologies in developing companion diagnostics for current or future Novartis therapeutics. Further details regarding specific drugs or disease focus were not provided.
Finally, Gen-Probe said that it expects to report 2009 revenues in the range of $460 million to $490 million, while its earnings per share will be in the range of $1.80 to $2.05. The firm is scheduled to release its 2008 financial results on Feb. 17.
Lenetix to Co-market CombiMatrix MDx Tests
CombiMatrix this week said that its suite of array CGH-based tests will be co-marketed by New York-based diagnostics lab Lenetix.
The focus of the collaboration is CombiMatrix's suite of arrays for genetic conditions, primarily its BAC HD Scan test, which identifies more than 290 genomic causes of developmental disorders. Syndromes identified by the test include Down (trisomy 21), Prader-Willi, Smith Magenis, trisomy 13, trisomy 18, and DiGeorge syndromes, among others. The collaboration also includes CombiMatrix's Prenatal Scan array CGH test, a customized test specifically designed for use in prenatal diagnostics, said CombiMatrix.
"Our collaboration with Lenetix will help us increase awareness of our tests among primary care physicians including pediatricians, genetic counselors, and obstetricians-gynecologists — key customers of Lenetix," said Mansoor Mohammed, president and CEO of Combimatrix Molecular Diagnostics, in a statement.
Financial terms of the co-marketing pact were not disclosed.
Canada PGx Study Seeks Markers for Drug Reactions in Children
Canada will start a new pharmacogenomics program to seek predictive genomic markers that could indicate adverse drug reactions in children by harnessing information from an ADR research network that stretches across the country.
The aim of the C$3.9 million ($3.2 million) project is to find out why some drugs cause ADRs in some children and not others, and then to create diagnostic tests to predict and prevent specific reactions, Genome BC said last week.
The Canadian Pharmacogenomics Network for Drug Safety (CPNDS) is collecting data from nine of the country's largest children's hospitals and will perform large-scale genomic and proteomic studies to identify genes linked to certain ADRs. The results of these studies will be used to develop personalized dosing recommendations.
The research initially will focus on three specific ADRs, including deafness that is induced by the cancer drug Cisplatin, cardiotoxicity caused by the drug anthracycline, which is used to treat leukemia, and infant mortality that is associated with codeine use by the mother.
The project is funded by Genome BC, Pfizer Canada, the University of British Columbia, the Canadian Institute of Health Research, and the Canadian Foundation for Innovation. Institutions involved in the project include the UBC Centre for Molecular Medicine and Therapeutics, Child and Family Research Institute, BC Children's Hospital and BC Women's Hospital and Health Centre, the Centre for Healthcare Innovation and Improvement, and the University of British Columbia.
According to Health Canada, over 50 percent of newly approved therapeutics have serious ADRs that are discovered after they reach the market, and 75 percent of medications have not been tested in children.
In Canada, ADRs lead to between 10,000 and 22,000 deaths and over C$13 billion in spending per year, Genome BC said.
Epigenomics, Sysmex Ink Cancer MDx Pact
Epigenomics and Japanese firm Sysmex last week said that they have entered into a research and development collaboration aimed at developing a molecular diagnostics assay for cancer based on an Epigenomics biomarker.
The companies will evaluate the suitability of Sysmex's molecular diagnostics instrumentation for detecting DNA methylation cancer biomarkers in blood. Sysmex will use Epigenomics' mSEPT9 Methylation Detection Assay as a benchmark for development of its assay. Sysmex's plan is to develop and sell in Japan a blood test for early detection of colorectal cancer based on Epigenomics' mSEPT9 biomarker.
The firms also said that they have entered into negotiations for Sysmex to take a non-exclusive license to mSEPT9.
Sysmex will have access to Epigenomics' technologies through R&D licenses and technology transfer. It also will receive R&D support from Berlin-based Epigenomics. In return, Epigenomics will receive license fees, R&D funding, and reimbursements. It also will sell its mSEPT9 research-use only assay to Sysmex.
"With Sysmex we expect to create a route to the attractive Japanese market for our early cancer detection franchise," said Epigenomics CEO Geert Nygaard in a statement.