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Rosetta Genomics, Genoptix Merger Terminated

NEW YORK (GenomeWeb) – Rosetta Genomics announced today that its proposed merger with Genoptix has been scuttled after it failed to secure the necessary shareholder approval.

Rosetta said that as a result, it is obligated to reimburse Genoptix $750,000 in three installments, the first of which is due March 22. It added that Genoptix has indicated that it remains interested in pursuing a business arrangement with Rosetta, although it did not provide details about any potential deal.

Genoptix provides hematology and solid tumor molecular profiling to oncologists and pathologists, and offers clinical trial services such as assay and companion diagnostic development to biopharmaceutical partners. In December, it signed a deal to acquire Rosetta — which has undergone a series of changes recently including layoffs and a business divestiture — for $10 million.

At the time, Rosetta President and CEO Kenneth Berlin said that the company's cash position would only fund its operations to the end of 2017 and that itsinability to raise sufficient capital would be “a going concern for an extended period of time.”  The deal with Genoptix included a bridge loan facility of up to $1.8 million.

While Rosetta's board unanimously approved the acquisition, the firm said today that "an insufficient number of votes were cast in favor of the transaction to constitute a majority of the shares outstanding needed," resulting in Genoptix terminating the companies' merger agreement.

During early morning trading on the Nasdaq, shares of Rosetta tumbled nearly 17 percent to $0.30.

In November, the company received notice that its shares did not meet the Nasdaq's  $1 minimum bid price requirement for continued listing, and that it had until May 29 to regain compliance.