Transgenomic, Inc. To Purchase Clinical Data, Inc.'s Diagnostic Business
News Nov 30, 2010
This acquisition includes a suite of proprietary genetic commercial tests, certain proprietary biomarker assays, and the CLIA-certified laboratory operations of Clinical Data for a purchase price of approximately $15.4 million, primarily in cash and notes. Closing of the transaction is subject to customary regulatory approvals and closing conditions.
Craig Tuttle, Chief Executive Officer of Transgenomic, said, "This is a significant transaction for our company. It brings a well established and growing molecular diagnostic business addition, a substantial and established revenue base and validated new biomarker assays along with a talented diagnostic team. Importantly, the acquisition provides us with multiple growth opportunities through continued growth of the eleven test FAMILION® product portfolio of molecular assays for inherited cardiac disorders plus several proprietary assays for testing patients' response to important cancer treatments and patients' drug metabolism of a variety of drugs. This acquisition will significantly improve our competitive position and enhance our customer support and patient care capabilities. We look forward to completing this acquisition and integrating these assets into Transgenomic as quickly as possible."
Clinical Data has built the commercial, managed care and CLIA-certified laboratory infrastructure and capabilities to support its currently marketed tests including the FAMILION family of genetic tests for inherited heart diseases and PGxPredict® tests for predicting drug response. The diagnostic business includes: The FAMILION family of 11 commercialized proprietary tests; contracts with private and government health insurers for test reimbursement with coverage policies that offer access to genetic testing for an estimated 280 million patients; established academic and medical society guidelines, as well as the Heart Failure Society of America guidelines, that include genetic testing that can be identified by FAMILION tests that detect genetic mutations that cause cardiac channelopathies or cardiomyopathies; pipeline opportunities that include the Fc gamma receptor family of oncology tests and a clopidogrel response test; marketing resources; testing and customer service capabilities; intellectual property and rights; a state-of-the art facility; and equipment.
Financial Terms and Financing
The purchase price of $15.4 million consists of $6.0 million in cash, $8.5 million in a three-year note issued to Clinical Data bearing interest of 10% per annum with a principal repayment schedule beginning in May 2012, and a second note of $932,000 for facility improvements made to the CLIA-certified laboratory at 6.5% interest for a 12-month period.
Additionally, following the closing of the transaction, Clinical Data will be entitled to receive milestone payments upon the successful development and commercialization of multiple new products, royalty payments based on certain reimbursements received by the Company in connection with the performance of certain biomarker assays of the Company, a percentage of certain account receivables collected during the 18 month period following the closing, and a percentage of the aggregate proceeds received by the Company in connection with certain transfers of certain biomarker assay technology.
Griffin Securities, Inc. acted as financial adviser and placement agent to Transgenomic, Inc. on this transaction.