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Renalytix Stock Soars on Disclosure of Potential Acquisition

NEW YORK – Renalytix's stock closed up 41 percent on Monday following the company's disclosure that it has been approached by a large unnamed diagnostics firm regarding a potential acquisition.

In a document filed with the US Securities and Exchange Commission, the company said it has launched a formal sales process that will allow its board and advisers to "conduct an orderly process and engage more widely with all potentially interested parties."

In Monday trading on the Nasdaq, Renalytix shares hit a high of $1.77, up 70 percent over its previous closing price, before ending the day at $1.47.

In early morning trading on Tuesday, the company's stock was down about 14 percent at $1.27 per share. 

In a note to investors on Monday, BTIG analyst Mark Massaro said that the bank is "not aware an offer has been made," but that it expects "diligence is underway with one company" and that additional labs could show interest. He added that "there could be some logical synergies from lab companies with other commercialized and reimbursed blood-based kidney tests."

Massaro noted that news of a potential sale was not overly surprising as Renalytix "has executed on critical milestones in the past year, and sits with just $3.7M of cash on its balance sheet."

Last month, Medicare administrative contractor National Government Services (NGS) released a proposed local coverage determination that would cover Renalytix's KidneyIntelX.dkd test in certain circumstances. The proposed LCD marked the first coverage determination for the test, which is priced by Medicare at $950.

The company, which has offices in London and Salt Lake City, also said last month that its fourth quarter revenues declined 41 percent year over year, while it posted a net loss of $8.5 million, or $.09 per share.

Renalytix said it intends to appoint Stifel Nicolaus Europe Limited as sole financial adviser and Rule 3 adviser with respect to the formal sale process and any forthcoming offers.