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Cancer Genetics acquires vivoPharm

Thursday, August 17, 2017

Cancer Genetics and vivoPharm have entered into a definitive agreement for Cancer Genetics to acquire vivoPharm for approximately $12 million. This transaction will significantly strengthen CGI’s position in oncology discovery, in vivo and in vitrodrug development and early phase clinical trial testing for biotechnology and pharmaceutical companies. With over a decade of experience in delivering a wide range of discovery and preclinical services to support drug development, target validation and biomarker analysis, vivoPharm has supported over 200 IND submissions for innovative therapies, with a significant focus on immuno-oncology.

vivoPharm has developed industry recognized capabilities in early phase development and discovery, especially in immuno-oncology models, tumor micro-environment studies, specialized pharmacology services, and PDx (patient derived xenograft) model studies that support basic discovery, preclinical and phase I clinical trials. vivoPharm presently serves over forty biotechnology and pharmaceutical companies across five continents in over 55 studies and trials with highly specialized development, clinical and preclinical research. The vivoPharm team is led by Dr. Ralf Brandt and will be fully integrated as the flagship in CGI’s Discovery Services offering with Dr. Brandt serving as the President of CGI Discovery & Early Development Services.

As a market-leading CRO, vivoPharm services approximately forty clients, the majority of which are located outside the U.S., with its diverse client base, ranging from virtual biotech companies to large top 10 pharmaceutical companies. vivoPharm has generated compounded annual revenue growth of 14% over the past three fiscal years, and has expected USD revenues of approximately $5 million in the most recent fiscal year (vivoPharm’s fiscal year ends on June 30). vivoPharm specializes in planning and conducting unique, specialized studies to guide drug discovery and development programs with a concentration in oncology and immuno-oncology, ranging from early compound selection to developing comprehensive sets of in vitro and in vivo data, as needed for FDA Investigational New Drug (IND) applications. vivoPharm’s studies have been utilized to support over 200 IND submissions to date across a range of therapeutic indications, including lymphomas, leukemia, GI-cancers, liver cancer, pancreatic cancer, non-small cell lung cancer, and other non-cancer rare diseases.

Dr. Brandt will become President of Discovery & Early Development Services at CGI upon completion of the acquisition, which is expected to close on Tuesday, August 15, 2017 and lead the integration of 32 people into Cancer Genetics while continuing to service vivoPharm’s global customer base. Over the past 10 years, vivoPharm has generated an extensive library of market-leading human xenograft and syngeneic tumor models, including subcutaneous, orthotopic and metastatic models. vivoPharm’s specialized tumor and disease models, toxicology and pharmacology services and animal imaging capabilities provide CGI opportunities to deepen its relationships with existing biopharma customers through additional discovery and downstream molecular work, while also furthering CGI’s previously announced initiative aimed at early-phase drug repurposing and drug rescue programs.

Since being awarded its Good Laboratory Practices (GLP) compliance status in 2004, vivoPharm is equipped to execute a broad range of toxicology studies in various mammalian species in accordance with the appropriate regulatory standards. With 32 full-time employees globally, vivoPharm operates approximately 14,000 square feet of AAALAC-accredited and GLP-compliant, state-of-the-art laboratories in Melbourne, Australia and Hershey, Pennsylvania, and maintains a presence in Munich, Germany dedicated to project management, client services and clinical affairs.

The purchase price is approximately $12 million, which will include $1.2 million in cash and the remaining 90% will be shares of CGI common stock based on the volume weighted average price (VWAP) over the last 20 business days. The transaction has been approved by the Boards of Directors of both companies. Additionally on August 14, CGI entered into an equity financing arrangement for up to $16 million to fund the acquisition, and increase working capital for general corporate purposes. The initial tranche of funding will be $3 million, and additional tranches can be accessed by CGI at the company’s discretion over the next two years.

The acquisition is expected to be immediately accretive, adding both revenue and income. The combination of capabilities is expected to create considerable business opportunities in both pre-clinical studies and immuno-oncology clinical trials, to further accelerate CGI’s strategy to be the premier partner of choice for oncology innovation and development from bench to bedside.

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