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| Cancer Genetics CEO Panna Sharma |
Cancer Genetics ($CGIX) got approval from a U.S. bankruptcy court in Delaware to purchase Response Genetics, almost two months after the company emerged as the highest bidder in an auction sale of Response's long-beleaguered business.
In August, Los Angeles-based Response (RGI) selected Cancer Genetics (CGI) as its "stalking horse" bidder to snatch up "substantially all" of its assets after it went bankrupt. With the latest U.S. bankruptcy court greenlight, CGI will move one step closer to finalizing its $14 million deal for Response. If all goes to plan, the sale is expected to close by Oct. 9, the company said in a statement.
CGI stands to benefit from the deal, tacking on $10 million to $12 million in revenue over the next year--including a potential $6 million from contracts with biopharma partners--and expanding its solid tumor molecular diagnostics offerings to include lung cancer, colorectal cancer and melanoma tests that help evaluate a patients' response to therapy. CGI will also get its hands on an FDA-approved test for tumors of unknown origin, TOO, that RGI picked up from Pathwork Diagnostics in 2013.
Under the terms of the deal, Rutherford, NJ-based CGI will inherit RGI's 27,000-sq-ft CLIA-certified lab in Los Angeles. The company plans to turn the facility into a center of excellence in solid tumors with a special focus on lung cancer.
When all is said and done, CGI will have "expertise in solid and hematological cancers, a national geographic footprint, and the ability to provide services to large-scale clients including biotechnology/pharmaceutical companies and clinicians," it said in a statement.
In the meantime, CGI continues to expand its presence in the industry through dealmaking and reimbursement efforts. Earlier this year, the company got a green light from the California Department of Health to provide its oncology testing services for patients in the state, opening the door to a larger market for its cancer products.
In May, CGI struck a genomics deal with Japan's ReproCELL to lend its sequencing tools to the company's translational medicine projects. CGI plans to process several thousand samples over the next two years at its Hyderabad, India-based genomics lab, helping ReproCELL advance its portfolio while beefing up in regenerative medicine.
"This effort represents a major milestone for Cancer Genetics, and our India operation, as we continue to focus on its high-quality growth, and on partnering with companies in the region that can utilize our capabilities to accelerate our understanding of cancer," CGI CEO Panna Sharma said at the time of the deal.
- read CGI's statement