PETALUMA, Calif.—Tegal Corp. recently announced the closing of an agreement to acquireCollabRx Inc., a privately held technology company in the rapidly growingmarket of interpretive content and data analytics for genomics-based medicine.
Tegal willissue 236,433 shares of common stock, representing 14 percent of its totalshares outstanding prior to the closing, to former CollabRx stockholders inexchange for 100 percent of the capital stock of CollabRx. Tegal and certainformer CollabRx stockholders entered into a stockholders agreement providingfor, among other things, registration rights, transfer restrictions and votingand standstill agreements. Tegal also assumed $500,000 of existing CollabRxindebtedness through the issuance of five-year promissory notes in substitutionfor outstanding notes previously issued by CollabRx. In addition, Tegalwill grant a total of 368,417 restricted stock units and options as "inducementgrants" to newly hired management and employees, all subject to four-yearvesting and other restrictions.
The CEOs of the two companies, Thomas Mika of Tegal andJames Karis of CollabRx, will serve as co-CEOs of the combined, publicly tradedcompany, with headquarters in San Francisco. Tegal entered into an employmentagreement with Karis that will become effective at the closing and he will alsobe appointed to Tegal's board of directors. Tegal will continue to operateunder its current name and ticker symbol for the time being, but plans to seekstockholder approval at its upcoming annual meeting in September 2012 for anamendment to its certificate of incorporation, changing its corporate name toCollabRx Inc.
"This acquisition marks both the successful conclusion of atransition process and the beginning of a new chapter for Tegal Corp.," saysMika. "This is a mission Tegal's board has embraced wholeheartedly. I am verypleased to be working with James Karis as co-CEO and fellow director, and lookforward to building a dynamic company in a new era of genomic medicine."
Originally founded in 2008 by Silicon Valley Internetpioneer and cancer survivor Jay (Marty) Tenenbaum, CollabRx has developedclinical advisory networks, expert systems, proprietary tools and processes anda pipeline of commercial data products and applications for cancer. Ten years ago, suffering from metastatic melanoma,Tenenbaum was given 12 months to live. He researched various experimental drugtreatments, and credits a failed cancer vaccine, among other drugs, for savinghis life. Through the company he founded, CollabRx, Tenenbaum aims to leveragethe extraordinary untapped expertise and resources across the industry toempower individual patient healthcare through personalized research.
CollabRx offers cloud-based expert systems that provideclinically relevant interpretive knowledge to institutions, physicians,researchers and patients for genomics-based medicine in cancer and otherdiseases to inform healthcare decision-making. With access to approximately 50clinical and scientific advisors at leading academic institutions and a suiteof tools and processes that combine artificial intelligence-based analyticswith proprietary interpretive content, the company is well positioned toparticipate in the $300 billion value-added "big data" opportunity in the U.S.healthcare market (as reported by McKinsey Global Institute), over half ofwhich specifically targets areas in cancer and cancer genomics, according toMcKinsey.
CollabRx Therapy Finders, the company's first commercialproduct, provides personalized and actionable information to physicians andpatients for rapidly determining the medical tests, therapies and clinicaltrials that may be considered in cancer treatment planning, with a specificemphasis on the tumor genetic profile.
CollabRx Therapy Finders are web-based apps that serve asone type of user interface to access proprietary CollabRx content. CollabRxcontent is dynamically updated and organized in a knowledgebase that includesinformation on molecular diagnostics, medical tests, clinical trials, drugs,biologics and other information relevant for cancer treatment planning.Capturing how highly respected practicing physicians use this information inthe clinical setting further refines the knowledgebase.
"Medicine is entering a new era of low-cost genomesequencing and the proliferation of personalized treatments based on specificgenetic mutations," says Karis. "With the technology platform and expert systemleadership position that CollabRx has developed over the past few years, webelieve that the new company is in a position to lead the market for accurate,credible and current genomic information in the cancer space."