NEW YORK (GenomeWeb) – Genoptix has signed an agreement to acquire Rosetta Genomics for $10 million in cash, the companies announced today.
The merger has been unanimously approved by both firms' boards of directors and is expected to close in the first quarter of 2018. Rosetta’s shares will no longer be traded on the Nasdaq upon the deal’s closing, and the company will become a wholly owned subsidiary of Genoptix. After deducting expected payments for outstanding debt, convertible debentures, warrant termination payments, professional fees, expenses, and other items, the purchase price is equal to roughly $.60 for each outstanding share of Rosetta.
During early morning trading, shares of Rosetta dropped about 9 percent to $.57.
Genoptix provides hematology and solid tumor molecular profiling to oncologists and pathologists, and offers clinical trial services such as assay and companion diagnostic development to biopharmaceutical partners. It was acquired by Novartis in 2011, and sold off by the pharmaceutical giant earlier this year to private investment firms Ampersand Capital Partners and 1315 Capital.
Rosetta, meanwhile, has undergone a series of changes recently as it worked to keep its stock from being delisted from the Nasdaq for, among other things, failure to meet the exchange's $1 minimum bid requirement. During 2017, the company — originally founded as a microRNA diagnostics and therapeutics developer — refocused its efforts on its RosettaGx Reveal test for classifying indeterminate thyroid nodules, announced layoffs, and divested molecular diagnostics firm PersonalizeDx, which it had acquired about two years earlier.
And while Rosetta reported cash and cash equivalents of $1.3 million as of June 30, Genoptix said that it has secured a bridge loan facility of up to $1.8 million to fund Rosetta's operations through the closing of the acquisition.
"Our current cash position is sufficient to fund operations only until the end of 2017, and given our current market capitalization, potential for pending delisting from the Nasdaq Capital Market, and the difficult financing environment for microcap molecular diagnostics companies, we do not believe we could raise sufficient capital to continue as a going concern for an extended period of time," Rosetta President and CEO Kenneth Berlin said in a statement.
"We believe that there is a significant opportunity in the diagnosis of thyroid cancer utilizing Reveal and we intend to leverage our world-class commercial capabilities to become a leader in this space," Genoptix President and CEO Joseph Limber added in the statement. "Furthermore, Rosetta's cutting-edge microRNA-based technology will be the foundation of many more diagnostic tests to be incorporated into Genoptix's oncology portfolio."