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Rosetta Staves off Bankruptcy with Payment to Former Marketing Partner Prometheus

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Rosetta Genomics last week said that it has avoided bankruptcy by coming up with money owed to one-time partner Prometheus Laboratories.

Rosetta said that it has paid Prometheus $650,000, plus accrued and unpaid interest, on a promissory note that was due Nov. 22.

As reported by Gene Silencing News, in 2009 Prometheus was licensed the US market rights to Rosetta's three lead microRNA diagnostics: miRview Mets; miRview Meso, which differentiates lung cancer from mesothelioma; and miRview Squamous, which is designed to differentiate squamous from non-squamous non-small cell lung cancer (GSN 4/16/2009).

However, it came to light last year that the companies were unable to agree on "the scope and funding of the development plan" outlined in their licensing agreement.

In an SEC filing, Rosetta also said that it had accused Prometheus of failing to use "commercially reasonable efforts" to market the three miRNA diagnostics, while Prometheus charged that Rosetta breached a stock-purchase agreement, signed at the time the licensing arrangement was consummated, that called for Prometheus to buy 2 million newly issued shares of Rosetta stock at $4 per share, translating to a roughly 14 percent stake in the miRNA shop.

The companies eventually settled the matter, with Rosetta taking back the rights to the diagnostics in exchange for paying Prometheus $3.1 million in several installments. The first payment of $1.2 million was due on Dec. 2, 2010. The payment of $650,000 was due on Nov. 22, 2011. Still outstanding is a $750,000 payment due on May 22, 2012.

Rosetta revealed last month that it wasn't able to make the third payment, and if Prometheus exercised its right to declare the remaining balance immediately due, it “may be required to file for protection under … bankruptcy laws.”

Last week, Rosetta said that it “cured” the default, although it provided no details on how it did so.

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