Cancer Genetics gets approval to buy Response Genetics
Cancer Genetics, a DNA-based cancer diagnostics provider, has received approval from the U.S. bankruptcy court in Delaware to purchase substantially all of the assets of Los Angeles-based Response Genetics Inc. (RGI), a CLIA-certified clinical laboratory focused on the development and sale of molecular diagnostic testing services for cancer. CGI also agreed to assume some of RGI’s liabilities. The sale is subject to certain customary closing conditions and is expected to close by Oct. 9.
The acquisition, if consummated, is expected to contribute an additional $10 million to $12 million to CGI in revenue over the next 12 months and to expand CGI’s solid tumor molecular diagnostics offering to include lung cancer, colorectal cancer and melanoma tests that help determine a patient’s response to cancer therapy. Once integrated, the combined entity 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.
In 2014, RGI was awarded the multiyear Adjuvant Lung Cancer Enrichment Marker Identification and Sequencing Trials (ALCHEMIST) contract by the National Cancer Institute, focused on biomarker-based treatment for lung cancer. Cancer Genetics, as part of the transaction, will take over the ALCHEMIST contract.
The purchase price is about $14 million, which will include $7 million in cash and 788,584 shares of CGI common stock.