Interpace Diagnostics Group, Inc. (NASDAQ: IDXG) (“Interpace” or
the “Company”), announced today that it has acquired assets and
certain liabilities constituting the Biopharma Services business of
Cancer Genetics, Inc. (NASDAQ: CGIX) (the “BioPharma Business”) for
approximately $23.5 million subject to certain adjustments. The
acquisition is expected to create a leading oncology testing and
service company in the clinical diagnostic and Biopharma markets,
leveraging sophisticated assays, novel algorithms and custom
service capabilities across the continuum of oncology from
precancerous assessment to drug discovery and clinical trial
support. In conjunction with this acquisition Ampersand Capital
Partners, one of the leading private equity firms in the
diagnostic/biopharma sector, agreed to invest $27M in Interpace in
two tranches of newly issued convertible preferred stock, a portion
of which will be subject to approval by Interpace’s shareholders.
In 2018 the Biopharma Business of Cancer
Genetics reported net revenues of approximately $15 million.
Interpace believes that the BioPharma Business has significant
potential to benefit from the Interpace molecular business, add new
clients and grow revenue over time. Interpace further believes that
the combined organization has the potential to be a leader in
enabling personalized and precision medicine by offering advanced
diagnostics, molecular marker testing, data solutions and biopharma
services. The BioPharma Business will continue to provide its full
suite of molecular and biomarker-based tests for its oncology and
immuno-oncology drug development customers operating out of its
existing laboratories in Rutherford, NJ and Research Triangle Park,
NC.
“I am very excited about our acquisition of the
BioPharma Business of Cancer Genetics, and the support and
confidence that Ampersand Capital Partners has shown in our
expertise and capabilities,” said Jack Stover, President & CEO
of Interpace. “I believe that expanding more aggressively into the
growing BioPharma sector with a strong product and service
offering, as well as partnering with one of the leading private
equity firms in this space, will be transformative for Interpace
and will also benefit the patients and customers we now serve in
each market.”
Herb Hooper, Managing Partner at Ampersand
Capital Partners added, “We see the opportunity for Interpace, with
its strong product portfolio and commercial capabilities, to be a
platform for building a leading franchise in the oncology-related
molecular and biopharma laboratory services space. Ampersand’s
investment is intended to assist Interpace as it continues to add
capabilities and accelerate its growth trajectory within both the
clinical diagnostic and BioPharma markets.”
Under the terms of the acquisition agreement,
Interpace purchased the BioPharma Business pursuant to a Uniform
Commercial Code Article 9 transaction whereby secured creditors
were paid off and Interpace made an additional payment of
approximately $4.5 million to Cancer Genetics, using proceeds from
the initial financing provided by Ampersand. In addition, Interpace
issued Cancer Genetics a $7.7 million 6% interest bearing note due
upon the earlier of Interpace’s shareholder approval and
Ampersand’s second tranche investment or three years.
Ampersand’s investment in Interpace’s Preferred
Stock has an initial conversion price to Common of $.80, subject to
adjustment, representing a premium of approximately 14% over
Interpace’s most recent closing bid price.
National Securities Corporation, a wholly-owned
subsidiary of National Holdings Corporation (NASDAQ:NHLD) acted as
financial advisor to Interpace in connection with the acquisition
of the BioPharma Business and Pepper Hamilton LLP acted as legal
advisor to Interpace in connection with the BioPharma Business
acquisition and Ampersand financing.
Conference Call Information
Interpace will hold a conference call and webcast on Tuesday,
July 16, 2019 at 8:30am ET to discuss today’s announcement. Details
are as follows:
Date and Time: Tuesday, July 16, 2019 at 8:30
am ET Dial-in Number (Domestic): (877) 407-0312
Dial-in Number (International): +1 (201) 389-0899
Confirmation Number: 13692704
Webcast Access:
https://webcasts.eqs.com/interpacedia20190708/en
The webcast replay will be available on the Company’s website
approximately two hours following completion of the call and
archived on the Company’s website for 90 days.
About Interpace Diagnostics, Group,
Inc.
Interpace’s Diagnostic Business is a fully
integrated commercial and bioinformatics business that provides
clinically useful molecular diagnostic tests, bioinformatics and
pathology services for evaluating risk of cancer by leveraging the
latest technology in personalized medicine for improved patient
diagnosis and management. Interpace currently has four
commercialized molecular tests and one test in a clinical
evaluation process (CEP): PancraGEN® for the diagnosis and
prognosis of pancreatic cancer from pancreatic cysts; ThyGeNEXT®
for the diagnosis of thyroid cancer from thyroid nodules utilizing
a next generation sequencing assay; ThyraMIR® for the diagnosis of
thyroid cancer from thyroid nodules utilizing a proprietary gene
expression assay; and RespriDX® that differentiates lung cancer of
primary vs. metastatic origin. In addition, BarreGEN® for Barrett’s
Esophagus, is currently in a clinical evaluation program whereby we
gather information from physicians using BarreGEN® to assist us in
positioning the product for full launch, partnering and potentially
supporting reimbursement with payers. Interpace’s mission is to
provide personalized medicine through molecular diagnostics,
innovation and data to advance patient care based on rigorous
science. For more information, please visit Interpace’s website at
www.interpacediagnostics.com.
The Biopharma Services
Business
Interpace’s Biopharma Business is a market
leader in providing pharmacogenomics testing, genotyping, and
biorepository services to the pharmaceutical and biotech
industries. The Biopharma Business also advances personalized
medicine by partnering with pharmaceutical, academic, and
technology leaders to effectively integrate pharmacogenomics into
their drug development and clinical trial programs with the goals
of delivering safer, more effective drugs to market more quickly,
and improving patient care.
About Ampersand Capital
Partners
Founded in 1988, Ampersand is a middle market
private equity firm dedicated to growth-oriented investments in the
healthcare sector. With offices in Boston, MA and Amsterdam,
Netherlands, Ampersand leverages a unique blend of private equity
and operating experience to build value and drive superior
long-term performance alongside its portfolio company management
teams. Ampersand has helped build numerous market-leading companies
across each of its core healthcare sectors, including Avista Pharma
Solutions, Brammer Bio, Confluent Medical, Genewiz, Genoptix,
Talecris Biotherapeutics, and Viracor-IBT Laboratories. Additional
information about Ampersand is available at
www.ampersandcapital.com.
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, Section 21E of the Securities Exchange Act of 1934 and the
Private Securities Litigation Reform Act of 1995, relating to the
Company's future financial and operating performance. The Company
has attempted to identify forward looking statements by terminology
including "believes," "estimates," "anticipates," "expects,"
"plans," "projects," "intends," "potential," "may," "could,"
"might," "will," "should," "approximately" or other words that
convey uncertainty of future events or outcomes to identify these
forward-looking statements. These statements are based on current
expectations, assumptions and uncertainties involving judgments
about, among other things, future economic, competitive and market
conditions and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are
beyond the Company's control. These statements also involve known
and unknown risks, uncertainties and other factors that may cause
the Company's actual results to be materially different from those
expressed or implied by any forward-looking statement. Known and
unknown risks, uncertainties and other factors include, but are not
limited to, the fact that there is no assurance that there will be
shareholder approval of a portion of Ampersand’s investment or that
Ampersand will make the second tranche investment, that the
acquisition will be successfully integrated with the Company, or
that the potential benefits of the acquisition, including future
revenues, will be successfully realized, the Company’s history of
losses, the market's acceptance of its tests, the Company’s ability
to retain and secure reimbursement, and the Company’s ability to
maintain its NASDAQ listing, among other things. Additionally, all
forward-looking statements are subject to the “Risk Factors”
detailed from time to time in the Company's most recent Annual
Report on Form 10-K and Quarterly Reports on Form 10Q. Because of
these and other risks, uncertainties and assumptions, undue
reliance should not be placed on these forward-looking statements.
In addition, these statements speak only as of the date of this
press release and, except as may be required by law, the Company
undertakes no obligation to revise or update publicly any
forward-looking statements for any reason.
CONTACTS:
Investor Relations - Edison Group Joseph Green (646)
653-7030
jgreen@edisongroup.com
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