Rosetta Genomics has Signed a Binding Term Sheet to Acquire Parkway
Clinical Laboratories Inc., a Company Owning a Clinical Laboratory
Improvement Act (CLIA) Certified Lab The Acquisition is Intended to Significantly Streamline the Development and
Commercialization of Rosetta Genomics' microRNA-based Diagnostics Owning a CLIA-certified Lab Will Provide Rosetta Genomics With the Freedom it Needs to Market and Sell its microRNA-based Tests in the U.S. and Around
REHOVOT, Israel and JERSEY CITY, New Jersey, June 11 /PRNewswire-FirstCall/ -- Rosetta Genomics Ltd. (Nasdaq: ROSG), a leader in the development of microRNA-based diagnostics and therapeutics, announced today that it has signed a binding term sheet to acquire Parkway Clinical Laboratories Inc. ("Parkway"), a privately-held CLIA-certified lab located in Bensalem, Pennsylvania, for an aggregate purchase price of $2,900,000, consisting of $1,900,000 in cash and $1,000,000 of Rosetta's ordinary shares. An additional $300,000 will be payable upon the achievement of certain milestones. The closing of the acquisition is subject to (i) satisfactory completion of financial, accounting, operating, legal and regulatory due diligence by Rosetta, (ii) receipt of all necessary approvals and consents and (iii) negotiation and execution of a definitive purchase agreement and related agreements. Parkway owns an emerging national CLIA-certified clinical reference laboratory with an expected $3M in revenues and marginal operating income in 2008.
"The acquisition of Parkway Clinical Laboratories is an important strategic addition for Rosetta Genomics which we anticipate will enable us to expedite the commercialization of our first microRNA-based diagnostic tests," said Amir Avniel, President and CEO of Rosetta Genomics. "The lab's wide experience in diagnostic testing and regulatory compliance will provide us with strong commercial infrastructure that will complement our advanced R&D capabilities."
The acquisition is expected to allow Rosetta Genomics to expedite development and validation of its microRNA-based diagnostic tests both in the U.S. and worldwide. In addition, ownership of the CLIA-certified lab will allow Rosetta Genomics to control the commercialization of its diagnostics, including marketing, sales, and reimbursement strategy. The move is an important part of the Company's commercialization and growth strategy.
The 5,000 square foot laboratory will complement two additional CLIA-certified labs in New York and California, Columbia University Medical Center's High Complexity Molecular Pathology Laboratory and University of California Irvine School of Medicine's CLIA lab, which are also expected to offer diagnostics based on Rosetta Genomics' microRNA technology.
Following the acquisition, Rosetta Genomics will be joined by thirty three employees from Parkway, including Dr. Raza Bokhari, MD., Parkway Clinical Laboratories' CEO, President and Chairman of the Board, who will be joining Rosetta Genomics' senior management as Chief Development Officer.
"We are excited to be joining Rosetta Genomics in developing ground-breaking microRNA-based diagnostics," said Dr. Raza Bokhari. "I am confident that the expertise of our laboratory, the sophisticated talent pool available in the mid-Atlantic region, and abundant life sciences opportunities present in the greater Philadelphia area will have a strong and meaningful impact on Rosetta Genomics' worldwide commercialization strategy."
Over the past several years, Dr. Bokhari developed outstanding expertise in aggregating and accelerating multi-specialty pathology companies.
In 2001, Dr. Bokhari took over Lakewood Pathology Associates (LPA), a struggling multi-specialty surgical pathology laboratory in Lakewood, New Jersey. During his term as LPA President and CEO, the company's revenue grew tenfold, its client base expanded to more than 25 states and it created over 100 new jobs in the region. Dr. Bokhari sold LPA in May 2006 to a Chicago-based private equity fund, Waterstreet Healthcare Partners.
In April 2003, Dr. Bokhari acquired Parkway Clinical Laboratories (PCL), a small CLIA-certified laboratory in Bensalem, PA. He has been incubating PCL for the past five years. In that time, revenues have grown from $500k to an expected $3M in 2008 and its employee count has increased from less than ten (10) to more than thirty (30) today.
"This is a critical milestone in the path to commercializing Rosetta Genomics' microRNA-based diagnostics," noted Ronen Tamir, Executive Vice President of Marketing and Communications at Rosetta Genomics. "Parkway Clinical Laboratories' expertise in diagnostic testing, reimbursement, and regulatory compliance, will provide us with the freedom we need to market and sell our microRNA-based tests in the U.S. and around the world. We expect the acquisition of this CLIA-certified lab to significantly streamline the development process of our wide microRNA-based diagnostics pipeline."
The first three of Rosetta Genomics' microRNA-based tests expected to
enter development and validation at Parkway's facility are:
- Squamous vs. Non Squamous non-small cell lung cancer - This test is
designed to differentiate squamous from non squamous non- small cell lung
cancer (NSCLC) using a single microRNA. The ability of physicians to
accurately differentiate squamous from non-squamous NSCLC is an important
treatment guide. Certain angiogenesis inhibitors for non-squamous non
small cell lung cancer (NSCLC) include a black-box warning about
substantially higher rates of severe or fatal hemorrhage among patients
with squamous NSCLC histology compared with non-squamous NSCLC. In
addition, several other targeted drugs for NSCLC currently under
development may require this sensitive differentiation.
- Mesothelioma vs. Adenocarcinoma - Differentiating between mesothelioma
and adenocarcinoma is critical for optimal therapy, but it is often
difficult to differentiate. Currently, there is no objective,
standardized test to aid pathologists in differentiating between the
many possible tumors in the lung and pleura. Based on several microRNA
biomarkers, this test is designed to separate mesothelioma from
adenocarcinoma tumors including lung adenocarcinoma and metastases to
the lung or to the pleura
- Cancer of Unknown Primary (CUP) - In 3%-5% of all new cancer patients,
clinicians cannot identify the origin of a patients' tumor. This
information is crucial for determining treatment type.
As demonstrated in a paper published by Rosetta Genomics and collaborators in the April issue of Nature Biotechnology, Rosetta Genomics has developed a panel of microRNA biomarkers potentially able to identify approximately thirty cancer types. This test is designed to assist clinicians to accurately identify the origin of tumors.
MicroRNAs (miRNAs) are recently discovered, naturally occurring, small RNAs that act as master regulators and have the potential to form the basis for a new class of diagnostics and therapeutics. Since many diseases are caused by the abnormal activity of proteins, the ability to selectively regulate protein activity through microRNAs could provide the means to treat a wide range of human diseases. In addition, microRNAs have been shown to have different expression in various pathological conditions. As a result, these differences may provide for a novel diagnostic strategy for many diseases.
About Rosetta Genomics
Rosetta Genomics (Nasdaq: ROSG) is a leader in the field of microRNA. Founded in 2000, the company's integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong IP position and proprietary platform technologies, Rosetta Genomics is working on the application of these technologies in the development of a full range of microRNA-based diagnostic and therapeutic tools, focusing primarily on cancer and various women's health indications.
Forward-Looking Statement Disclaimer
Various statements in this release concerning Rosetta's future
expectations, plans and prospects, including without limitation, statements
relating to the expected completion of the acquisition of Parkway by
Rosetta and the expected impact the acquisition, if completed, will have on
the commercialization of Rosetta's microRNA-based diagnostics, Parkway's
expected revenues and operating income for 2008, the role of microRNAs in
human physiology and disease, the potential of microRNAs in the diagnosis
and treatment of disease and the expected timing of diagnostic tests using
our microRNA technology constitute forward-looking statements for the
purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from
those indicated by these forward-looking statements as a result of various
important factors, including risks related to: Rosetta's approach to
discover microRNA technology and to work on the application of this
technology in the development of novel diagnostics and therapeutic tools,
which is unproven and may never lead to marketable products or services;
Rosetta's ability to fund and the results of further pre-clinical and
clinical trials; Rosetta's ability to obtain, maintain and protect the
intellectual property utilized by Rosetta's products; Rosetta's ability to
enforce its patents against infringers and to defend its patent portfolio
against challenges from third parties; Rosetta's ability to obtain
additional funding to support its business activities; Rosetta's dependence
on third parties for development, manufacture, marketing, sales, and
distribution of products; Rosetta's ability to successfully develop its
candidate tools, products and services, all of which are in early stages of
development; Rosetta's ability to obtain regulatory clearances or approvals
that may be required for its products and services; the ability to obtain
coverage and adequate payment from health insurers for the products and
services comprising Rosetta's technology; competition from others using
technology similar to Rosetta's and others developing products for similar
uses; Rosetta's dependence on collaborators; and Rosetta's short operating
history; as well as those risks more fully discussed in the "Risk Factors"
section of Rosetta's Annual Report on Form 20-F for the year ended December
31, 2006 as filed with the Securities and Exchange Commission. In addition,
any forward-looking statements represent Rosetta's views only as of the
date of this release and should not be relied upon as representing its
views as of any subsequent date. Rosetta does not assume any obligation to
update any forward-looking statements unless required by law.
|SOURCE Rosetta Genomics Ltd|
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