ProPhase Labs, Inc. (Nasdaq: PRPH) (“ProPhase” or the “Company”), a
diversified medical science and technology company, today announces
the acquisition of Nebula Genomics, a privately-owned personal
genomics company. The Company’s recently formed subsidiary,
ProPhase Precision Medicine, Inc., completed the acquisition for
approximately $14.6 million in a combination of ProPhase Labs
common stock and cash. The Company intends to integrate Nebula’s
whole genome sequencing services with the robust clinical
diagnostic testing services already offered at ProPhase’s
CLIA-certified molecular testing laboratories. ThinkEquity, a
division of Fordham Financial Management, Inc. acted as advisor to
ProPhase.
“We believe the future of medicine is in
precision, personalized and tailored therapies that are based on
each patient’s individual genetic makeup,” said Ted Karkus,
ProPhase’s Chief Executive Officer. “The acquisition of Nebula fits
our plan to better enable individuals who seek a better
understanding of their predisposition to genetic-based diseases and
guidance in the diagnosis of existing, genetically influenced,
conditions. A deeper understanding of a person’s genetic makeup
also enhances the ability to optimize lifestyle, therapeutic and
medical care decisions by helping to select and optimize
personalized courses of conduct and treatments. Nebula is on the
cutting edge of DNA sequencing technology and, combined with our
molecular laboratory capabilities, we believe that we will be able
to make personal genome sequencing more accessible at a lower cost,
while providing our customers with important and comprehensive
genetic insights.”
Nebula Genomics currently provides consumers
access to affordable and secure whole genome sequencing via its
online portal. Nebula’s solution is powered by the innovations of
George Church, Ph.D. Dr. Church has pioneered the development of
multiple DNA sequencing methods, including molecular multiplexing
approaches that enable next-generation DNA sequencing (NGS) as well
as nanopore sequencing. Nebula has been implementing large-scale
human genome sequencing to advance the understanding of the causes
of diseases and lay the foundation for personalized therapies of
the future. These include targeted gene therapies that aim to
ameliorate or cure genetic diseases.
Ted Karkus, CEO of ProPhase, stated: “Dr. Church
is a renowned and respected scientist. His willingness to serve as
the founding member of ProPhase Precision Medicine’s Scientific
Advisory Board will help enable us to recruit and build a
world-class Scientific Advisory Board as well as assist the Company
in targeting additional synergistic acquisitions.” In connection
with the acquisition, Dr. Church, as well as leading venture
capital investors have elected to convert their prior investments
in Nebula into ProPhase Labs’ common stock at the current market
price, which shares will be subject to a six-month holding period
under Rule 144 of the Securities Act.
Nebula Genomics’ technology decodes close to
100% of a person’s DNA, generating over 100 gigabytes of data. This
enables Nebula to provide its users with deep ancestry reports
based on Y chromosomal and mitochondrial DNA with a high level of
accuracy. Nebula’s whole genome sequencing DNA test also decodes
all ~20,000 genes in the human genome, which to the best of our
knowledge exceeds the amount of information offered by other widely
available services.
The Nebula DNA test can identify rare genetic
mutations, and is diagnostics-ready, providing valuable information
to healthcare providers in a HIPPA-compliant format. Nebula
Genomics was the first company to bring the cost of sequencing a
human genome below $300 (the cost of the first human genome
sequencing was approximately $3 billion) and subsequently became
one of the largest online direct-to-consumer whole genome
sequencing companies. Nebula Genomics now seeks to enter the
diagnostic genetic testing market and use its large trove of
high-quality whole genome sequencing data to conduct drug discovery
research.
ProPhase’s goal is for much of this
comprehensive DNA testing to be conducted in the Company’s
CLIA-certified labs. This would result in significantly faster
turnaround times at even further reduced cost to the users, which
could significantly increase demand and margins. In addition, for
the last 25 years, the Company has supplied dietary supplements to
40,000+ retail stores, including WalMart, Walgreens, CVS, and
others. The Company will seek to leverage this network and
infrastructure to further expand direct-to-consumer and big-box
retail distribution of Nebula’s whole genome sequencing
services.
Dr. George Church, an original investor and
co-founder at Nebula Genomics, stated, “Nebula Genomics is the
culmination of my decade-long efforts to make personal genome
sequencing widely accessible. By joining ProPhase Precision
Medicine, Nebula will now have access to resources that will enable
us to scale exponentially. I am excited to be a long-term partner
with ProPhase and have converted my initial investment in Nebula
into ProPhase equity.” added Dr. Church.
About Dr.
George Church
Dr. George Church is a Professor of Genetics at
Harvard Medical School and Director of PersonalGenomes.org, which
provides the world's only open-access information on human Genomic,
Environmental & Trait data (GET). After he received a Ph.D.
from Harvard University, Dr. Church pioneered the first methods for
direct genome sequencing, molecular multiplexing and barcoding.
These led to the first genome sequence (pathogen, Helicobacter
pylori). His innovations have contributed to nearly all
"next-generation" DNA sequencing methods and companies (CGI-BGI,
Life, Illumina, Nanopore). This, plus his lab's work on
chip-DNA-synthesis, gene editing, and stem cell engineering,
resulted in founding additional application-based companies
spanning fields of medical diagnostics (Knome/PierianDx, Alacris,
AbVitro/Juno, Genos, Veritas Genetics) and synthetic biology /
therapeutics (Joule, Gen9, Editas, Egenesis, enEvolv, WarpDrive).
He has also pioneered new privacy, biosafety, ELSI, environmental
& biosecurity policies. He is director of an IARPA BRAIN
Project and NIH Center for Excellence in Genomic Science. His
honors include election to NAS & NAE & Franklin Bower
Laureate for Achievement in Science. He has co-authored 590 papers,
155 patent publications and one book (Regenesis).
Inducement Award
In connection with the acquisition, Kamal Obbad,
CEO of Nebula, was awarded a stock option to purchase up to 250,000
shares of ProPhase common stock as an inducement to his employment
as SVP, Director of Sales and Marketing of ProPhase Precision
Medicine. This award was made in accordance with the employment
inducement award exemption provided by Nasdaq Rule 5635(c)(4) and
was therefore not awarded under the Company’s stockholder approved
equity plan. The option award will vest as follows, contingent upon
continued service: 25% is immediately vested, and the balance will
vest in equal annual installments over the next 3 years. The
options have an exercise price of $7.67 per share and will be
exercisable for a period of 7 years.
About ProPhase
Labs
ProPhase Labs (Nasdaq: PRPH) (“ProPhase”) is a
diversified biotech and genomics company that seeks to leverage its
existing CLIA lab services to provide whole genome sequencing and
research direct to consumers and to build a genomics data base to
be used for further research. The Company continues to provide
traditional CLIA molecular laboratory services, including COVID-19
testing. ProPhase Precision Medicine, Inc., focuses on genomics
testing technologies, a comprehensive method for analyzing entire
genomes, including the genes and chromosomes in DNA. The data
obtained from genomic testing can help to identify inherited
disorders and tendencies, help predict disease risk, help identify
expected drug response, and characterize genetic mutations,
including those that may drive cancer progression.
ProPhase Diagnostics offers a broad array of
clinical diagnostic and testing services at its CLIA certified
laboratories. ProPhase Diagnostics serves patients who may have
SARS-CoV-2 (COVID-19) through both saliva and nasal swab methods.
Critical to COVID testing, results are provided in under 24 hours.
ProPhase Diagnostics also offers PCR (polymerase chain reaction)
testing for Influenzas A and B and RSV; as well as antigen and
antibody/immunity tests to broaden its COVID-19 testing beyond
RT-PCR testing.
ProPhase Labs has decades of experience
researching, developing, manufacturing, distributing, marketing,
and selling OTC consumer healthcare products and dietary
supplements, including dietary supplements under the TK
Supplements® brand. ProPhase actively pursues strategic investments
and acquisition opportunities for synergistic companies,
technologies, and products. For more information, visit:
www.ProPhaseLabs.com
About Nebula Genomics
Nebula Genomics seeks to usher in the era of
personal genomics by building a distributed platform that will
accelerate genomic data generation, facilitate data access, and
streamline data analysis. The Nebula platform uses blockchain and
privacy-preserving technologies to enable individuals to maintain
control of their personal genomic data and share it securely. By
incentivizing personal genome sequencing and genomic data sharing,
Nebula Genomics will make large genomic datasets available to
researchers which will help advance understanding of human
genetics, accelerate drug discovery, and streamline clinical
trials. The company was founded by Harvard genomics pioneer George
Church, along with Harvard researchers Dennis Grishin and Kamal
Obbad. Founded in 2017, Nebula Genomics has offices in San
Francisco, CA and Boston, MA and is backed by investors including
Khosla Ventures, Fenbushi Capital, Mayfield, F-Prime Capital
Partners, GreatPoint Ventures, Hemi Ventures, Xfund and Mirae
Asset.
Forward Looking Statements
Except for the historical information contained
herein, this document contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our ability to make personal
genome sequencing more financially accessible and provide our
customers more comprehensive genetic insight than other DNA testing
companies, our ability to offer significantly faster turnaround
times for DNA testing and increase demand for these services, our
ability to leverage our retail relationships to promote Nebula’s
genome sequencing services, and the perceived advantages of whole
genome sequencing (WGS). Management believes that these
forward-looking statements are reasonable as and when made.
However, such forward-looking statements involve known and unknown
risks, uncertainties, and other factors that may cause actual
results to differ materially from those projected in the
forward-looking statements. These risks and uncertainties include
but are not limited to the consumer demand for WGS, the competitive
environment, challenges relating to entering into new business
lines, our ability to synergize the operations of ProPhase
Precision Medicine with ProPhase Diagnostics, our failure to obtain
and maintain certain regulatory approvals, our ability to expand
our labs’ testing capacity and execute on our business plan, and
the risk factors listed from time to time in our Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and any other SEC
filings.
Investor Contact:CORE IRJules
Abraham917-885-7378julesa@coreir.com
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