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Amarantus Acquires DioGenix for up to $10.9M

NEW YORK (GenomeWeb) – Amarantus BioScience said today that it has acquired DioGenix and its pipeline of molecular tests for immune-mediated neurodegenerative diseases in a deal worth up to approximately $10.9 million.

Amarantus is acquiring all outstanding share capital and assets of DioGenix's diagnostic business. Acquired assets will not include any cash or cash equivalents. As payment for the acquisition, Amarantus will issue registered shares of its common stock valued at $8 million to DioGenix and will pay up to $900,000 for costs associated with the acquisition. Amarantus has also agreed to pay up to $2 million in milestone payments based on achievement of agreed-upon sales milestones. 

Amarantus, based in San Francisco, develops diagnostic tests in neurology and therapeutic products in neurology, psychiatry, ophthalmology, and regenerative medicine.

Meantime, Geneva-based DioGenix develops diagnostic tests for immune-mediated neurological diseases such as MS. Its lead product, MSPrecise, is a next-generation sequencing assay that can identify MS at first clinical presentation.

DioGenix will be merged into Amarantus as a foundational asset of a growing neuro-diagnostic business, the companies said. Amarantus will own all rights to DioGenix's products under development, including tests targeting neurosarcoid, neuromyelitis optica, paraneoplastic disease, and amyotrophic lateral sclerosis.

DioGenix's MSPrecise test is designed to address what the companies called a "tremendous unmet need in the diagnosis of MS." Patients that present with non-specific clinical symptoms or symptoms that are consistent with MS currently undergo a battery of diagnostic tests, including cerebral spinal fluid analysis using oligoclonal banding (OCB) alongside MRI.

However, misdiagnosis rates of more than 50 percent have been reported with standard methods, and the cost of each false positive diagnosis is estimated to be between $100,000 and $250,000, the companies said.

A recent clinical validation study of 334 subjects at 13 sites including major academic centers and community neurology clinics demonstrated that MSPrecise met the primary endpoint in patient suspected of having relapsing-remitting MS (RRMS). The test achieved a standalone diagnostic accuracy of 81 percent and sensitivity and specificity of 86 percent and 71 percent, respectively. When the results of MSPrecise were combined with the OCB results, diagnostic accuracy increased to 92 percent.

"Improving the standard of diagnosis for MS is of critical need for patients and physicians," David Lowe, member of the Amarantus board of directors, said in a statement. "The data generated in the clinical validation study clearly demonstrates that MSPrecise can play a vital role in improving the outcomes for patients more rapidly versus today's current standard alone. The addition of next-generation sequencing to our current stable of platforms also brings in tremendous know-how to our diagnostic unit that will in turn strengthen the company's base as we prepare to establish a standalone neurodiagnostic corporate entity."

In conjunction with the acquisition, Amarantus entered into definitive agreements to complete its Series E Preferred stock offering by raising an additional $1 million, bringing the total funds raised in the offering to $6 million. The additional funds will be used to pay for the costs associated with the closing of the DioGenix acquisition, the company said.