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UPDATE: Signal Genetics Makes Improved Offer to Market Med BioGene Test

This article has been updated to include a response from Med BioGene.

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Signal Genetics has made what it said is a "superior offer" to license Med BioGene's LungExpress Dx technology.

The LungExpress Dx technology is at the center of a lawsuit filed last month by Signal Genetics accusing Vancouver, British Columbia-based Med BioGene with fraud and Pittsburgh-based Precision Therapeutics with tortious interference. Signal said that it had been negotiating a licensing agreement for LungExpress Dx with Med BioGene before the Canadian firm licensed rights to Precision.

LungExpress Dx is a gene expression-based test that has been developed to identify patients with early-stage non-small-cell lung cancer who, following surgical removal of their tumor, are at higher and lower risks of mortality.

Last night, New York City-based Signal Genetics said that its Respira Health subsidiary had tendered an offer to license the technology at terms considered more generous than those in the agreement between Med BioGene and Precision Therapeutics.

The new offer includes a $2.3 million upfront payment and $1.2 million in subsequent milestone payments. In addition, Respira agreed to cover transaction expenses and the payment of any break-up fees totaling up to an additional $350,000.

Under the terms of the pact with Precision, Med BioGene would receive license fees and research reimbursement of $1.6 million within 120 days of closing of the agreement and is eligible to receive up to $1 million in milestone payments.

In addition to the increased payment, Signal said that the payment terms offered by Respira are superior to Precision's offer by 90 days, and it would increase the royalty rate on the product by .5 percent over Precision's offer.

Respira believes it can achieve commercialization of a CLIA-validated LungExpress Dx test within 90 days of an agreement at its lab in Little Rock, Ark.

In a statement released Wednesday afternoon, Med BioGene said that its board of directors is considering the offer and will announce its decision to accept or reject the offer "once a determination is made."

The firm noted that the closing of its licensing agreement with Precision is subject to, among other things, approval from Med BioGene's shareholders. MedBioGene has a special meeting of shareholders scheduled for April 12, at which shareholders will be asked, among other issues, to approve the agreement with Precision.