NEW YORK (GenomeWeb) – Rosetta Genomics last week filed for Chapter 7 bankruptcy, just one day after disclosing that its planned merger with Genoptix was in trouble.
Late last year, Genoptix agreed to acquire Rosetta for $10 million in cash, but that deal failed to garner enough support from Rosetta shareholders. The companies later signed another merger agreement that valued Rosetta at $9 million and was ultimately approved by Rosetta's investors.
While the transaction was slated to close on May 27, Rosetta said on May 30 that Genoptix had "refused to provide assurances that it intends to complete the transaction" due to an undisclosed "material adverse effect" affecting Rosetta, as well as breaches of representations and warranties.
Rosetta disputed Genoptix's claims, and said that it would file for bankruptcy protection if the merger was not consummated. According to documents filed with the US Bankruptcy Court for the District of Delaware, Rosetta filed for Chapter 7 bankruptcy on May 31.
Under Chapter 7 bankruptcy, a company seeks to liquidate its assets. Among Rosetta's listed creditors are Agilent Technologies, Fisher Scientific, Integrated DNA Technologies, and Sigma Aldrich.
Rosetta had offices in Israel and New Jersey and developed and commercialized microRNA-based diagnostic tests for various cancers. During the past year, the company underwent a series of strategic moves as its business struggled. In September, it announced layoffs as part of a plan to trim $1.7 million in expenses. It also agreed to sell its PersonalizeDx unit for $2.9 million.
The company also found itself in trouble with the Nasdaq for failing to meet certain listing requirements.