NEW YORK (GenomeWeb) – MDxHealth today said that it has signed a deal to buy NovioGendix, a firm developing a liquid biopsy test for prostate cancer, for $8.8 million.
Based in Nijmegen, Netherlands, NovioGendix was spun out of Radboud University Medical Center in 2007 and provides diagnostic tests for prostate, bladder, kidney, and other urologic cancers. Its main focus is on developing a liquid biopsy test for prostate cancer that can identify patients at low risk for the disease.
According to MDxHealth, 1.8 million prostate cancer biopsies are performed yearly in the US and the European Union. Of that, 1.3 million will turn out to be negative, and a test such as NovioGendix's could help reduce the number of unnecessary biopsies.
NovioGendix's test is CE marked and has been validated to run on several PCR platforms. MDxHealth CEO Jan Groen said that his firm plans to launch the test as SelectMDx for Prostate Cancer in the US as a laboratory-developed test in 2016. Meanwhile, NovioGendix's facility in the Netherlands will help MDxHealth expand its presence in Europe and will serve as a platform to launch the test as a kit inEuropein 2016.
"The acquisition of NovioGendix provides us with a validated, non-invasive, actionable testing option for prostate cancer and allows us to address the larger market opportunity of initial biopsy for early cancer detection, complementing our ConfirmMDx test for repeat biopsy," Groen said in a statement.
Under the terms of the cash and stock deal, MDxHealth will buy all of NovioGendix Holding's outstanding shares. Of the $8.8 million price tag, $5.1 million will be payable in new MDxHealth shares, $283,345 in cash, and up to an additional $3.3 million in cash in six payments upon the achievement of certain milestones.
MDxHealth will also grant NovioGendix a bridge loan of $680,000 to repay its outstanding debts. The acquisition is expected to be completed around Sept. 18.
The acquisition is expected to add about $500,000 to MDxHealth's operating expenses in 2015, it said. Pursuant to the completion of the deal, the company will propose adding NovioGendix Co-founder Jack Schalken to its board as an independent director.
MDxHealth said that NovioGendix will continue to collaborate with Radboud University Medical Center. Schalken, NovioGendix Co-founder Willem Melchers, and researchers at Radboud had developed a PCA3 gene test for prostate cancer, but according to MDxHealth, that test has several drawbacks. The partners are developing an mRNA test to differentiate patients with aggressive, clinically significant prostate cancer from patients with slower growing forms of the disease. MDxHealth said that in initial studies the new test has outperformed the PCA3 test.