NEW YORK – Oncocyte said Tuesday that it has agreed to acquire German diagnostics firm Chronix Biomedical.
Under the agreement, which supersedes a previously announced collaboration between the companies, Oncocyte will acquire Chronix's cancer immunotherapy monitoring test, TheraSure-CNI Monitor, as well as the intellectual property for its organ transplant monitoring technology.
Chronix's CNI test quantitatively measures the level of copy number variation present in a cancer patient's blood. The company has shown in previous data that changes in CNI over time correspond to response or lack thereof to cancer immunotherapy.
The terms of the acquisition include Oncocyte delivering $2.675 million in cash and $1.5 million of its common stock (or approximately 295,000 shares) at closing of the transaction. The company also will assume liabilities not to exceed $5.5 million. The agreement also provides for Oncocyte to pay a revenue share on the net collected revenues for certain tests and services for specific periods and to pay a combination of cash or common stock of up to $14 million if certain milestones are achieved.
The merger is subject to approval of the transaction by Chronix shareholders and is expected to be completed by April 30, 2021. At that time, Chronix’s development and business team will become part of Oncocyte's R&D department, but will maintain lab operations in Germany, where it will continue development and work toward commercial launch of the two monitoring tests. This EU-based team will also lead Oncocyte’s commercial efforts for its DetermaRx and DetermaIO tests in the region.
Irvine, California-based Oncocyte said it expects to launch TheraSure-CNI Monitor for research use and pharma trials in the second half of 2021 and intends to accelerate further validation of the assay to support clinical use.
"We believe that acquiring Chronix … provides us with a strong patent portfolio that can serve as the basis for our blood-based therapy monitoring and recurrence monitoring programs, and ultimately create significant value for Oncocyte. The acquisition also establishes a footprint in the EU for our Company and access to an incredibly talented team with years of development experience in blood-based testing for cancer therapy and transplant rejection," Oncocyte CEO Ron Andrews said in a statement.