Diagnostic Lab CRO Venture Created
Houston-based Power3 Medical, a developer of protein biomarkers and diagnostic technology research, has formed a new joint venture contracted research organization (CRO) with Fort Myers, Fla.-based NeoGenomics, a clinical diagnostic laboratory specializing in cancer genetics testing. Power3 Medical, which owns a minority stake in the yet unnamed CRO, will use the firm to advance its proteomics and genomics diagnostic testing technology. The companies stated they will take the next six months to develop the new firm’s business model and begin operations thereafter.
Under the agreement, NeoGenomics will provide $200,000 in cash to Power3 within 15 days by purchasing a convertible debenture-an instrument similar to a bond. The company was also granted options to increase its stake in Power3 to up to 60% of the fully diluted shares in the next 18-20 months.
The diagnostic testing sector is particularly strong within the research outsourcing market because of advances in genetics and a push for more precise molecular biomarkers. The future of pharmacogenomics - or the study of how variations in genes affect a drug safety and efficacy-has been heralded as an essential role in the era of personalized medicine.
"We are optimistic that the contract research organization will allow us to become much more vertically integrated as a high complexity laboratory capable of developing our own intellectual property and proprietary products. By adding the ability to perform specialized testing around Power3's biomarkers, we believe we can generate high margin revenue for the CRO and lay the foundation for a relationship with Big Pharma to develop companion diagnostic tests for some of the many promising drugs in the FDA pipeline," said Robert Gasparini, president and chief scientific Officer at NeoGenomics.