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On the right path for MDx growth
June 2010
EDIT CONNECT
SHARING OPTIONS:
PITTSBURGH, Pa.— Acting on its strategy to
become an
internationally recognized player in molecular diagnostics, ExonHit
Therapeutics SA, a therapeutics and diagnostics developer based in Paris,
announced April 26 that it will acquire RedPath Integrated Pathology Inc., a
privately held molecular
diagnostics company focused on cancer.
ExonHit will pay $12.5 million cash and $10 million in stock
up front to acquire RedPath, which brings to the table a Clinical Laboratory
Improvement Amendments (CLIA)-certified, College of American
Pathologists
(CAP)-inspected laboratory, experienced management, regulatory and
reimbursement expertise and an established sales force. RedPath will
become
part of ExonHit's U.S. operations, and its 35 employees will be retained.
Starting in 2012, RedPath's current shareholders may receive
additional
payments of up to $9.5 million if specific sales targets are met. Subject to
shareholder and other customary approvals, the transaction is
expected to close
by mid-July.
Dr. Loïc Maurel, president of ExonHit's management board,
says
the acquisition is a complementary fit between ExonHit's RNA platform and
RedPath's DNA platform, as it directly links the significant role DNA
mutations
play in altering the regulation of alternative splicing.
ExonHit's proprietary
technology, based on the analysis of
alternative RNA splicing, aims to develop innovative molecular diagnostic tests
and therapeutics for
neurodegenerative and cancer indications. In December
2009, the company launched its first product, AclarusDx, a blood-based
biomarker that identifies
patients suffering from Alzheimer's disease (AD), as
a "research use only" product. This test is designed to discriminate AD
patients from healthy
individuals. ExonHit anticipates a CE marking in Q4 2010,
and is preparing the launch of AclarusDx in the clinical in vitro diagnostic (IVD)
market with laboratory partners for
a European launch in Q1 2011. ExonHit has also initiated discussions with the
U.S. Food and Drug Administration
(FDA) to define the exact regulatory pathway
to meet IVD requirements.
RedPath's PathFinderTG
technology, a molecular analysis of
mutations in genomic DNA for cases where traditional pathology results in an
"indeterminate" diagnosis," uses a
broad panel of microsatellite markers
to perform mutational analysis on many types of pathology specimens. Unlike
tests for inherited genetic
predisposition to cancer, it is an analysis of
acquired genomic damage in an individual patient's tumor. According to RedPath,
this objective
information can help resolve diagnostic dilemmas and lead to a
more personalized treatment plan.
According to the companies, more than 10 percent of all
described human gene mutations directly impact splicing. The combined approach
will
allow for the possibility of more accurate diagnostic tests with a
strengthened IP position.
"We
believe we are building a molecular diagnostic
powerhouse," Maurel says. "I believe we will be the only company with RNA and
DNA capabilities in-
house. RNA and DNA research is something we both believe is
going to be very interesting in the future, which is one of the areas where we
see a lot of
synergies."
Of equally important consideration to ExonHit in this
transaction was that it gives the
French company an opportunity to establish a
commercial presence in the United States—a market that represents 55 percent of
the multi-billion-dollar
molecular diagnostics market, Maurel says.
"In combining the two companies' strengths, we are
increasing revenues through our products which have already been launched,
while also expanding and strengthening our diagnostic portfolio in cancer,"
he
says. "We also have the opportunity to launch RedPath's products in Europe."
Founded in 2004 by a pathologist from the
University of
Pittsburgh Medical Center to commercialize molecular technology integrated with
an anatomical pathologist workflow, RedPath has to date
been funded by angels
and venture capitalists. The company was in the process of raising another
round of venture capital when it was approached by
ExonHit, says Mark D.
Myslinski, RedPath's president and CEO.
"They were attracted to our
expertise in DNA and the
clinical applications of our technologies, as well as our foundation of
success," says Myslinski, who will lead ExonHit's
global diagnostics division
and join the company's management board upon closing of the transaction. "The
acquisition gives us access to European
markets, different platforms and
additional products, and of course, the funding that will allow us to continue
to build value in our company."
PathFinderTG can differentiate metastatic, synchronous and
recurrent tumors in various organs,
such as breast, lung, liver, endometrium
and ovary. PathFinderTG works with a wide variety of standard pathology
specimens, even minute, solid samples
and small fluid volumes from specimens
such as histology slides, cytology slides, fluid aspirates and brush samples.
RedPath
has successfully developed, launched and earned
reimbursement for the
PathFinderTG molecular diagnostic assay for pancreatic
cancer. A second
assay to differentiate primary from metastasis tumors is being
launched. The company's other service lines include two programs in late-stage
development and several earlier stage development programs in oncology.
"The transaction is good
news for both the investors and the
entire RedPath team, who will remain highly involved in the development and
commercialization of the PathFinderTG
line and constitute a key asset for the
commercial success of AclarusDx in the U.S.," Myslinski says. "Additionally,
the company is eager to bring
the clinical solutions to the EU patients and
clinicians who will benefit from the clinical utility of the assays."
As the two companies work to integrate their teams, ExonHit
has its eye on securing other partners, Maurel says.
"We want to create a strong new player in the molecular diagnostics
field, and growing by acquisition is definitely something
in our plans," he
says.
Code: E061012 Back |
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