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Rosetta Grants Prometheus Rights to Sell Suite of microRNA Diagnostics in US

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This story has been updated to include comments from Rosetta's president and CEO.

Rosetta Genomics
this week announced that it has granted the right to market and sell its three microRNA-based diagnostics in the US to drug and diagnostic firm Prometheus Laboratories.

The deal is the latest move by Rosetta to find commercialization partners for its existing products as it shifts its focus onto non-invasive tests designed to screen for, rather than diagnose, disease.

Under the terms of the deal, Prometheus will hold the US rights to Rosetta's miRview Meso, which differentiates lung cancer from mesothelioma; miRview Mets, which is designed to determine the source of cancers of unknown primary origin; and miRview Squamous, which is designed to differentiate squamous from non-squamous non-small cell lung cancer.

Rosetta launched all three tests in the US late last year.

In exchange, Rosetta stands to receive undisclosed payments from Prometheus, either in the form of milestones or research and development funding, as well as royalties on net product sales.

Under a separate agreement signed concurrently, Prometheus will buy 2 million newly issued shares of Rosetta stock at $4 per share, representing a 40 percent premium to the stock's average closing price over the past three business days. According to Rosetta President and CEO Amir Avniel, the transaction gives Prometheus a roughly 14 percent stake in Rosetta.

On Monday, shares of Rosetta closed at $3.40.

The companies have also agreed to jointly develop two additional miRNA-based gastroenterology diagnostics. Prometheus will fund the effort and hold the exclusive rights to the new tests, while Rosetta stands to receive milestone and royalty payments connected to their development and commercialization.

Additional details about this collaboration were not disclosed, but Avniel told RNAi News this week that it does not cover any diagnostics already in Rosetta's development pipeline, including a test to determine the likelihood of gastric-cancer recurrence.

Screen Saver

Since the US launch of miRview Meso, miRview Mets, and miRview Squamous, Rosetta had been publicly stating its interest in finding allies with the experience to market and commercialize the diagnostics domestically and internationally.

In January, Rosetta announced that Israeli drug maker Teva Pharmaceuticals had become the exclusive distributor of the tests in Israel and Turkey (see RNAi News, 1/08/2009).

Now, through the Prometheus arrangement, the miRNA tests "will be available across the US and will be supported by an organization with a proven ability in diagnostic testing services and in launching new products," Avniel said in a statement.

In addition, by handing off the diagnostics' commercialization responsibilities to Prometheus, Rosetta is free to work on its portfolio of non-invasive screening tests, which the company recently announced had become its key focus (see RNAi News, 3/26/2009).

Although Rosetta has for years been focused on developing miRNA diagnostics and therapeutics (see RNAi News, 11/4/2005), last month the company announced that it would now direct its efforts onto screening tests, which "target millions of healthy individuals and … therefore, potentially hold enormous … financial impact on our company," Avniel said at the time.

As part of that change in strategy, Rosetta said that it would limit its R&D activities during 2009 to a blood-based screen for colon cancer, dubbed miRscreen Colon, which could hit the market before the end of the year.

According to Avniel, tests for screening disease, in this case cancer, are the "blockbuster of the diagnostics area" since patients' survival rates are significantly higher if the disease is detected and treated in its earliest stages.

Once Rosetta had developed the technology necessary to detect and capture miRNAs in body fluids, he said today, the company was free to shift its attention to this potentially lucrative field.

"The goal will be to screen a full range of populations in order to detect cancer," he said. "It's a bigger opportunity and [represents] a bigger change in the healthcare system."

But Rosetta hasn't dropped development of its diagnostic candidates, which include a test to predict how ovarian cancer patients will respond to treatment. Avniel said last month that this work would resume next year, possibly through a partnership.

One aspect of Rosetta's miRNA portfolio that has slipped off the radar, however, is its therapeutics pipeline. To date, the company has a single drug-development program, a liver cancer therapy under development with Regulus Therapeutics, a joint venture between Isis Pharmaceuticals and Alnylam Pharmaceuticals (see RNAi News, 9/25/2008).

Rosetta has been quiet about that effort recently and did not mention it during a recent conference call held to discuss its fourth-quarter financial results. Meanwhile, the company has begun formally referring to itself as a "molecular diagnostics" firm, listing "the development of microRNA-based diagnostics" as its sole mission on its corporate website.

Avniel said this week that the Regulus collaboration continues to move forward, noting that Rosetta expects to present data from the liver-cancer program next week at the American Association for Cancer Research's annual meeting.

However, he declined to comment on Rosetta's plans for additional therapeutic programs.

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