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Unable to Reach Licensing Deal, Rosetta Genomics Will Not Receive $1.25M Payment

NEW YORK (GenomeWeb News) – Unable to reach a licensing deal with a lender, Rosetta Genomics will not receive a $1.25 million payment, the company disclosed in a document filed with the US Securities and Exchange Commission today.

Rosetta and the unnamed lender had agreed to negotiate for the licensing deal as part of a $1.75 million private placement raise that Rosetta announced in late January.

Rosetta had been in negotiations with the lender since late January for a deal that would have provided Rosetta a one-time payment of $1.25 million in return for a worldwide exclusive license to all current and future issued patents, patent applications, patent filings, know how, data, other intellectual property, license and contract rights controlled by Rosetta or any current or future subsidiary, and all of Rosetta's rights under certain license agreements.

Such an agreement would have provided the lender rights to all predictive, diagnostic, prognostic, and theranostic uses and applications associated with cancer with the use of any body fluid, Rosetta originally said. The deal would have excluded all of Rosetta's current tests — miRview mets; miRview mets^2; miRview squamous; miRview meso; and miRview lung.

In its SEC document, Rosetta did not mention the $1.25 million it will not receive, saying only that it "and the lender were unable to finalize and execute the license agreement prior to the deadline," which was originally set for Feb. 29 and extended twice.

Rosetta also originally said that if an agreement could not be reached, the interest rate on the debentures that were sold to raise the $1.75 million would increase to 18 percent annually. The rate would be 10 percent if a licensing deal was struck.

Rosetta is currently in the midst of a turnaround effort and in the fall announced a restructuring in order to reduce cash burn. In addition to the $1.75 million raised in January, the Israeli molecular diagnostics firm raised $1.5 million in November, and sold its stake in Rosetta Green in December for $900,000.

The company also has been warned by Nasdaq that it is not in compliance with a listing requirement calling for at least $1 per share for at least 30 consecutive business day and could face delisting action as a result. It has until May 29 to regain compliance.