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US Bankruptcy Court OKs Cancer Genetics' Buy of Response Genetics' Assets

NEW YORK (GenomeWeb) – Cancer Genetics today said that US Bankruptcy Court in Delaware has approved the firm's plan to purchase substantially all of Response Genetics' assets. 

Response Genetics announced in August that hit had filed for Chapter 11 bankruptcy protection and entered into a deal to be bought by Cancer Genetics for $14 million, comprised of $7 million in cash and $7 million in stock. For the stock portion of the deal, Cancer Genetics will issue 788,584 shares of its common stock to Response Genetics.

The deal is expected to be completed by Oct. 9 and is anticipated to provide between $10 million and $12 million in revenues to Cancer Genetics during the next 12 months, it said. It also is expected to expand the company's solid tumor molecular diagnostics offering to include lung cancer, colorectal cancer, and melanoma tests that help in determining whether patients respond to cancer therapy. 

The combined firm will have expertise in solid and hematologic cancers and a national geographic footprint, Cancer Genetics said, and it will provide services to large-scale clients, such as biotechnology and pharmaceutical firms and clinicians. 

The company also plans to take over Response Genetics' 27,000-square-foot CLIA-certified, CAP-accredited laboratory in Los Angeles and develop it into a center of excellence in solid tumors with a focus on lung cancer. Additionally, Cancer Genetics will take over Response Genetics' ALCHEMIST trial contract, which was awarded by the National Institutes of Health last year and will use tumor sequencing and genetic markers to determine whether therapies targeting genetic alterations can prevent lung cancer recurrence.

Response Genetic was awarded a "multi-million dollar" subcontract from Leidos Biomedical Research, a contractor for the NCI-sponsored Frederick National Laboratory for Cancer Research, to handle molecular profiling for the trial.