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As Part of Financing Deal, Rosetta to Out-License miRNA Tech for Biofluid-Based Cancer Dx

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By Doug Macron

Rosetta Genomics said last week that it is working to out-license a portion of its microRNA intellectual property and technology in the field of oncology in an effort to raise funds so that it can focus on its core areas of interest.

Specifically, as part of a financing arrangement with an undisclosed investor, Rosetta has agreed to negotiate an exclusive, worldwide license that would give an unnamed party the rights to its miRNA know-how and IP in the field of body fluid-based diagnostics in oncology.

In exchange, Rosetta would be paid a one-time fee of $1.25 million.

According to Rosetta President and CEO Ken Berlin, the transaction would allow Rosetta to continue working on tissue-based cancer diagnostics and would not affect its existing suite of marketed miRNA diagnostics.

“We're not in [the biofluid-based cancer diagnostic] field today,” he told Gene Silencing News. While Rosetta had been exploring the development of lung and colon cancer screens based on miRNA signatures obtained from blood samples, the company has since shifted its focus onto other diagnostic indications including heart failure, neurodegenerative diseases, and women's health.

“From our perspective, we've reserved rights in all the fields that we care most about” and maintained rights for tissue-based cancer diagnostics, he said.

Berlin added that the potential licensing deal does not preclude Rosetta from developing body fluid-based tests in areas outside of oncology.

Rosetta said that it aims to close the licensing transaction by the end of February.

News of the possible deal comes as Rosetta closed the sale of $1.75 million in senior secured debentures in a private transaction with an unnamed investor. The terms of that arrangement call for Rosetta to negotiate the license “in good faith,” it said.

If the license agreement isn't formalized by Feb. 29, or at a later date agreed upon by the potential licensee, the interest rate on the debentures would increase.

The financing marks Rosetta's latest effort to overcome a cash crunch under which it has been struggling for some time.

Late last year, Rosetta cut more than half its staff to trim costs (GSN 10/13/2011).

A couple of months later, the company was facing bankruptcy for not being able to meet a payment obligation to one-time marketing partner Prometheus Laboratories, although it eventually made the payment (GSN 12/08/2011).

In late December, Rosetta scraped together additional funds by selling its majority stake in one-time subsidiary Rosetta Green for $900,000, with the potential for a $2 million payment within three years if certain milestones and conditions are met (GSN 12/22/2011).


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