Gen-Probe and DiagnoCure Amend Agreement Surrounding PCA3-Based Prostate Cancer Tests
News May 05, 2009
Gen-Probe Incorporated and DiagnoCure Inc. has announced that the companies have signed an amendment to their 2003 license agreement, establishing new FDA submission milestones and key distribution arrangements to leverage the full market potential of the PCA3-based test for prostate cancer in the United States, Europe and around the world.
As part of the amendment, Gen-Probe will acquire 4.9 million shares of newly issued DiagnoCure convertible preferred stock for US$5.0 million (C$6.1 million), representing a premium of 19.8% over the average market price of the common shares of DiagnoCure during the 20 trading days from yesterday, subject to DiagnoCure securing the required regulatory approvals from the Toronto Stock Exchange. These convertible preferred shares are non-voting, and may be exchanged for common shares on a one-for-one basis.
DiagnoCure has the option to redeem the preferred shares or to require their conversion into common shares in certain circumstances. As part of its investment in DiagnoCure, Gen-Probe will receive a liquidation preference in certain cases and a security interest in some intellectual property. This subscription will take place on or around May 7th 2009 and will be completed pursuant to a statutory prospectus and registration exemptions.
The new milestones for an FDA submission of a PCA3 test can be fulfilled by Gen-Probe with its current end-point TMA assay or its investigational, real-time TMA assay.
As part of the contract amendment, Gen-Probe will make annual payments of US$500,000 to DiagnoCure until specific milestones are met. Half the amounts paid will be applied against future royalties payable to DiagnoCure.
Also, in an effort to maximize the global reach for the PCA3 prostate cancer test, DiagnoCure and Gen-Probe have agreed on terms to develop key distributor relationships in countries where it is commercially more effective to do so, such as in Japan, Asia, Israel, South Africa and others.
In a separate press release today, Gen-Probe announced that it intends to initiate in the third quarter of 2009 a pivotal clinical study of its investigational PCA3 assay that could lead to regulatory approval by the U.S. Food and Drug Administration (FDA).