NEW YORK (GenomeWeb) — Cancer Genetics (CGI) and NovellusDx announced today that they have agreed to merge.
The transaction will combine CGI's portfolio of cancer tests and laboratory service offerings with NovellusDx's next-generation sequencing and machine-learning technologies for cancer treatment response prediction.
"The combined company has an opportunity to become an essential partner for biopharma companies to support their efforts to develop better, more targeted therapeutics and improve patient outcomes in cancer treatment," CGI CEO John Roberts said in a statement.
Under the terms of their definitive agreement, Jerusalem-based NovellusDx will merge with a newly formed Israeli subsidiary of CGI. In exchange, NovellusDx shareholders will receive a roughly 49 percent stake in CGI.
Rutherford, New Jersey-based CGI will be the surviving entity and is expected to continue trading on the Nasdaq. CGI's Roberts will be CEO of the combined company, with NovellusDx Chairman Charles Woler assuming the same role at post-merger CGI.
During early morning trading, shares of CGI were up 5 percent to $1.11.
The deal has been approved by the boards of both companies and is expected to close in the first quarter of 2019 pending shareholder approval and other customary closing conditions.
Certain existing investors in privately held NovellusDx, including OrbiMed Israel Partners II, Pontifax (Israel) IV LP, Helsinn Investment Fund SA, SICAR, and Windham Venture Partners, have said they intend to invest $10 million into CGI immediately following completion of the merger. Additionally, NovellusDx has agreed to provide a bridge loan of up to $2.3 million to CGI in conjunction with the signing of the definitive agreement.