On December 15, 2017 Genoptix, Inc., a leading oncology diagnostic laboratory, and Rosetta Genomics Ltd. (NASDAQ: ROSG), a genomic diagnostics company that improves treatment decisions by providing timely and accurate diagnostic information to physicians, reported that they have entered into a definitive merger agreement under which Genoptix will acquire all of the outstanding shares of Rosetta Genomics for a total gross purchase price of $10 million (Press release, Rosetta Genomics, DEC 21, 2017, View Source [SID1234522760]). After deducting expected payments for outstanding debt, convertible debentures, warrant termination payments, professional fees, expenses and other items, this purchase price equates to an amount that is preliminarily estimated to be $0.60, in cash, for each ordinary share of Rosetta Genomics outstanding at closing. Genoptix is a portfolio company of Ampersand Capital Partners and 1315 Capital.
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Genoptix is also providing a secured bridge loan facility of up to $1.8 million to fund the operations of Rosetta Genomics through the closing of this transaction.
This merger has been unanimously approved by the Board of Directors of both companies, and the closing is expected to occur during the first quarter of 2018, subject to approval by Rosetta Genomics’ shareholders and customary closing conditions. In connection with the proposed transaction, Rosetta Genomics intends to file a proxy statement with the Securities and Exchange Commission ("SEC"). Shareholders of Rosetta Genomics are urged to carefully review the proxy statement, when available, because it will contain important information about the proposed transaction and the estimated closing purchase price for each ordinary share.
Upon closing, trading in shares of Rosetta Genomics on the Nasdaq Capital Market will cease, and Rosetta Genomics will become a wholly owned subsidiary of Genoptix.
"After a comprehensive review of strategic alternatives that included financings, acquisitions, mergers, asset monetization and corporate partnerships, we determined that this proposed transaction with Genoptix is in the best interest of all Rosetta Genomics stakeholders, including our equity holders. Our current cash position is sufficient to fund operations only until the end of 2017, and given our current market capitalization, potential for pending delisting from the Nasdaq Capital Market and the difficult financing environment for microcap molecular diagnostics companies, we do not believe we could raise sufficient capital to continue as a going concern for an extended period of time," stated Kenneth A. Berlin, President and Chief Executive Officer of Rosetta Genomics.
"As a leader in cancer diagnostics with a more significant infrastructure, Genoptix is in a position to deploy the resources necessary to accelerate the growth of RosettaGX Revealä ("Reveal"), as well as add our solid tumor testing services to their existing product portfolio," added Mr. Berlin.
Joseph M. Limber, President and Chief Executive Officer of Genoptix, said, "The acquisition of Rosetta Genomics will broaden our product offering in oncology diagnostics, particularly in the solid tumor area. We believe that there is a significant opportunity in the diagnosis of thyroid cancer utilizing Reveal and we intend to leverage our world-class commercial capabilities to become a leader in this space. Furthermore, Rosetta’s cutting edge microRNA-based technology will be the foundation of many more diagnostic tests to be incorporated into Genoptix’ oncology portfolio."
Cantor Fitzgerald is serving as financial adviser to Rosetta Genomics on this transaction.