Precipio in advanced discussions with Poplar Healthcare towards a multi-faceted strategic partnership
February 18 2020 - 10:00AM
Specialty diagnostics company Precipio, Inc. (NASDAQ: PRPO),
announced today that it is in advanced discussions with Poplar
Healthcare to establish a strategic partnership that includes,
among other transactions, the acquisition of the customer base of
Poplar’s Hematopathology division, OncoMetrix.
The planned transaction contemplates that
Precipio will assume responsibility for OncoMetrix's customer base
and associated revenues of approximately $3M (as of YE 2019,
unaudited). This will represent a potential doubling of Precipio’s
current pathology services revenue, and should provide a
substantial improvement to Precipio's laboratory economies of
scale, resulting in increased gross margins. Assuming discussions
proceed on course, Precipio anticipates this transaction to be
completed in the next 90 days.
As part of the transaction, three sales
representatives of OncoMetrix will transition to Precipio. There is
no consideration – either cash or stock - to be exchanged between
the parties at the outset. Each party expects to realize economic
and cash benefits following the completion of the transaction. The
impact to Precipio is essentially equivalent to the hiring of three
experienced sales rep that immediately bring in a substantial book
of business.
Additional elements of the transaction
contemplated include Precipio offering Poplar’s solid tissue
pathology services, and Poplar offering Precipio’s Hematopathology
services, through their sales teams. As both companies have been
engaged for several years in the pathology services business, each
has developed various competencies and strengths in areas such as
billing and contracting, laboratory technologies, logistics, sales
and marketing. Both companies will share best practices, as well as
leverage each other’s’ relative advantages in the various areas,
for the combined benefit of each company.
Precipio’s management is disclosing the
potential transaction in order to ensure that no parties involved,
including employees and providers for either company, would have
advanced knowledge and or access to what could potentially be
material non-public information. As contemplated, the transaction
would likely represent a significant increase to Precipio’s
existing pathology business, internal economies of scale and
geographic presence.
Both parties are currently in the process of
negotiating definitive agreements to ensure that providers and
their patients experience an orderly transition. However, there can
be no assurances that any transaction will result from these
negotiations, or of the terms, timing or approval of any such
transaction. Precipio will provide further information once a
definitive agreement has been reached, or if Precipio determines
that further disclosure is warranted. While Precipio’s management
currently believes there is a high likelihood of completing this
transaction in the next 90 days, investors should make their own
assessment as to the impact of this announcement prior to the
completion of the transaction.
“This strategic initiative represents a rapid
and effective way to scale up our business without any dilution to
our shareholders”, said Ilan Danieli, Precipio CEO. “Should this
transaction take place, it will represent the successful execution
of one of the strategic initiatives mentioned earlier this year,
intended to grow our business and generate value to our
shareholders.”
About Precipio
Precipio has built a platform designed to
eradicate the problem of misdiagnosis by harnessing the intellect,
expertise and technology developed within academic institutions and
delivering quality diagnostic information to physicians and their
patients worldwide. Through its collaborations with world-class
academic institutions specializing in cancer research, diagnostics
and treatment such as the Yale School of Medicine, Harvard’s
Dana-Farber Cancer Institute and the University of Pennsylvania,
Precipio offers a new standard of diagnostic accuracy enabling the
highest level of patient care. For more information, please visit
www.precipiodx.com.
Forward-Looking Statements
Certain statements in this press release
constitute “forward-looking statements,” within the meaning of
federal securities laws, including statements related to ICP
technology, including financial projections related thereto and
potential market opportunity, plans and prospects and other
statements containing the words “anticipate,” “intend,” “may,”
“plan,” “predict,” “will,” “would,” “could,” “should,” and similar
expressions, constitute forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995.
The Company’s actual results could differ materially from those
anticipated in these forward-looking statements as a result of
various factors. Factors that could cause future results to
materially differ from the recent results or those projected in
forward-looking statements include the known risks, uncertainties
and other factors described in the Company’s definitive proxy
statement filed on May 29, 2018, the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2019 and on the
Annual Report on Form 10-K for the year ended December 31, 2018 as
well as the Company’s prior filings and from time to time in the
Company’s subsequent filings with the Securities and Exchange
Commission. Any change in such factors, risks and uncertainties may
cause the actual results, events and performance to differ
materially from those referred to in such statements. All
information in this press release is as of the date of the release
and the Company does not undertake any duty to update this
information, including any forward-looking statements, unless
required by law.
Inquiries:
investors@precipiodx.com
+1-203-787-7888 Ext. 523
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