Exonhit to Acquire Redpath Integrated Pathology, Inc. and Accelerate Growth in Molecular Diagnostics
PARIS--(BUSINESS WIRE)--Regulatory News:
"RedPath provides a strong strategic and business fit with ExonHit. We are looking forward to working with the talented RedPath team and believe that this strategic move will give ExonHit a new dimension, with an innovative offering in oncology, the fastest-growing segment in molecular diagnostics."
Acquisition of an oncology-focused molecular diagnostics company commercializing products with high growth potential establishes ExonHit's commercial presence in the United States
RedPath brings a CLIA laboratory, experienced management, regulatory/reimbursement expertise and established sales force
Complementary fit between RedPath's DNA platform and ExonHit's RNA platform
ExonHit Therapeutics S.A. (Paris:ALEHT) ("ExonHit") announced today that it entered into a binding agreement for the acquisition of RedPath Integrated Pathology, Inc. ("RedPath"), a privately held molecular diagnostics company, focused on cancer. RedPath will become part of ExonHit's US operations.
Headquartered in Pittsburgh, Pennsylvania, RedPath has a unique DNA-based technology platform, PathFinderTG®, which provides diagnostic information that can lead to a more personalized patient clinical management decision. This powerful analytical tool improves the diagnosis of difficult cases in which cancerous or pre-cancerous conditions are not identified by a conventional pathology examination.
RedPath successfully developed, launched, and earned reimbursement for the sophisticated 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 acquisition of RedPath is a significant milestone in ExonHit's strategy to become an internationally recognized player in molecular diagnostics. This transaction will strengthen our presence in the USA which represents 55% of the multi-billion dollar molecular diagnostics market," said Loïc Maurel, M.D., President of the Management Board at ExonHit Therapeutics. "RedPath provides a strong strategic and business fit with ExonHit. We are looking forward to working with the talented RedPath team and believe that this strategic move will give ExonHit a new dimension, with an innovative offering in oncology, the fastest-growing segment in molecular diagnostics."
"We are very pleased with this outcome as it will benefit patients, clinicians and the employees of RedPath. Combining ExonHit's and RedPath's respective technologies, know-how and resources will help maximize the potential of both PathFinderTG® and AclarusDxTM platforms," stated Mark D. Myslinski, President and CEO of RedPath. "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 AclarusDxTM in the US. 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."
The addition of RedPath's DNA platform to ExonHit's RNA-based platform is a synergistic addition that directly links the significant role DNA mutations play in altering the regulation of alternative splicing. It is currently estimated that greater than 10% 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.
An integration team led by ExonHit's Chief Financial Officer Hervé Duchesne de Lamotte has been set to ensure a smooth and efficient transition for all stakeholders. ExonHit's global diagnostics division will be led by RedPath CEO Mark D. Myslinski, who will join ExonHit Management Board upon closing of the transaction.
Terms of agreement
Under the terms of the combination agreement, ExonHit Therapeutics will pay an upfront of USD 12.5 million in cash and USD 10 million in stock. Starting in 2012, RedPath's current shareholders may receive subsequent additional payments of up to USD 9.5 million dependent on the achievement of specific sales targets. The transaction, which is subject to approval by ExonHit's shareholders at an upcoming Extraordinary General Meeting to be convened, is expected to close before mid-July 2010.
RedPath Integrated Pathology, Inc. is a privately owned diagnostic company whose investors include NewSpring Health Capital, CID Capital, Seneca Health Partners and Inflexion Fund, L.P.
A meeting for institutional investors, analysts and journalists will be held by ExonHit's and RedPath's management teams tomorrow, Tuesday, April 27, 2010 at 9:30 am CET. Please contact Corinne Hoff (+33 6 66 63 47 98) for practical details.
About RedPath Integrated Pathology, Inc.
RedPath Integrated Pathology, Inc. is a US cancer-focused molecular diagnostic company that provides comprehensive molecular analysis to resolve challenging diagnostic dilemmas. The company's CLIA-licensed, CAP-certified laboratory delivers actionable diagnostic information that enables physicians to make personalized, effective treatment decisions for their patients. RedPath is located in Pittsburgh, Pennsylvania. For more information, please visit http://www.redpathip.com.
About PathFinderTG®
PathFinderTG® is a molecular analysis of mutations in genomic DNA for cases where traditional pathology results in an "indeterminate" diagnosis. This objective information can help resolve diagnostic dilemmas and lead to a more personalized treatment plan. This patented test utilizes 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.
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.
About ExonHit Therapeutics
ExonHit Therapeutics (Alternext: ALEHT) is a fast-emerging healthcare player active in both therapeutics and diagnostics. The company is applying its proprietary technology, based on the analysis of alternative RNA splicing, to develop innovative molecular diagnostic tests and therapeutics for neurodegenerative and cancer indications. ExonHit has a balanced investment strategy with in-house development programs and strategic collaborations, in particular with bioMérieux and Allergan.
ExonHit is headquartered in Paris, France and has U.S. offices in Gaithersburg, Maryland. The company is listed on Alternext of NYSE Euronext Paris. For more information, please visit http://www.exonhit.com.
Disclaimer
This press release contains elements that are not historical facts including, without limitation, certain statements on future expectations and other forward-looking statements, notably forward looking statements regarding the potential impact of the acquisition, including express or implied discussions on the potential future sales or earnings and any potential synergies, strategic benefits or opportunities as a result of the acquisition. Such statements are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, achievements, strategy, synergies or other events to differ materially from those anticipated.
In addition, ExonHit Therapeutics, its shareholders, and its affiliates, directors, officers, advisors and employees have not verified the accuracy of, and make no representations or warranties in relation to, statistical data or predictions contained in this press release that were taken or derived from third party sources or industry publications, and such statistical data and predictions are used in this press release for information purposes only.
Lastly, this press release may be drafted in the French and English languages. In an event of differences between the texts, the French language version shall prevail.