Transgenomic Inc. acquires Clinical Data’s diagnostic unit

OMAHA, Neb.—Explaining that the sale of its "non-corediagnostic business was the final piece in our transition to a drug developmentprogram with a new drug now under review at FDA, plus others in stage III andstage II trials," according to a company spokesperson, Clinical Data Inc. hassigned a definitive agreement to transfer its diagnostic business toTransgenomic Inc.

Theacquisition includes a suite of proprietary genetic commercial tests, certainproprietary biomarker assays and the CLIA-certified laboratory operations ofClinical Data for a purchase price of approximately $15.4 million, primarily incash and notes. Closing of the transaction is subject to customary regulatoryapprovals and closing conditions.

CraigTuttle, Transgenomic's CEO, considers the deal a significant transaction forthe company.

"Itbrings us a well-established and growing molecular diagnostic business, asubstantial and established revenue base and validated new biomarker assays,along with a talented diagnostic team," he says. "Importantly, the acquisitionprovides us with multiple growth opportunities through continued growth of the11 test FAMILION product portfolio of molecular assays for inherited cardiacdisorders, plus several proprietary assays for testing patients' response toimportant cancer treatments and patients' drug metabolism of a variety ofdrugs. This acquisition will significantly improve our competitive position andenhance our customer support and patient care capabilities. We look forward tocompleting this acquisition and integrating these assets into Transgenomic asquickly as possible."

Thefit looks right, since Transgenomic develops and markets a number of moleculardiagnostic tests and services for oncology, cardiology, hematology, inheriteddisorders and diseases of aging. These include the WAVE System and associatedconsumables specifically designed for use in genetic variation detection andsingle- and double-strand DNA/RNA analysis and purification. More than 1,450systems have been shipped to customers in more than 50 countries, the companystates. The SURVEYOR Mutation Detection Kits and SURVEYOR Check-It Kit providereagents and protocols for high-sensitivity detection of mutations in DNA.

"ClinicalData has built the commercial, managed care and CLIA-certified laboratoryinfrastructure and capabilities to support its currently marketed testsincluding the FAMILION family of genetic tests for inherited heart diseases andPGxPredic tests for predicting drug response," Tuttle notes.

Thediagnostic business includes the FAMILION family of 11 commercializedproprietary tests; contracts with private and government health insurers fortest reimbursement, with coverage policies that offer access to genetic testingfor an estimated 280 million patients; established academic and medical societyguidelines, as well as the Heart Failure Society of America guidelines,including genetic testing that can be identified by FAMILION tests which detectgenetic mutations that cause cardiac channelopathies or cardiomyopathies;pipeline opportunities that include the Fc gamma receptor family of oncologytests and a clopidogrel response test; marketing resources; testing andcustomer service capabilities; intellectual property and rights; a state-of-theart facility; and equipment.

Thepurchase price of $15.4 million consists of $6 million in cash, $8.5 million ina three-year note issued to Clinical Data bearing interest of 10 percent perannum with a principal repayment schedule beginning in May 2012, and a secondnote of $932,000 for facility improvements made to the CLIA-certifiedlaboratory at 6.5 percent interest for a 12-month period.

Additionally,following the closing of the transaction, Clinical Data will be entitled toreceive milestone payments upon the successful development and commercializationof multiple new products, royalty payments based on certain reimbursementsreceived by the company in connection with the performance of certain biomarkerassays, a percentage of certain account receivables collected during the18-month period following the closing and a percentage of the aggregateproceeds received by the company in connection with certain transfers ofcertain biomarker assay technology.