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OncoCyte to strengthen cancer research with Razor
Posted on Friday, 06 September 2019 10:58
OncoCyte has agreed to acquire US-based Razor Genomics for up to USD 33.00 million. The buyer will pay USD 10.00 million for an initial 25.0 per cent stake, with an additional earnout of USD 1.00 million also due, based on the Centers for Medicare and Medicaid Services Molecular Diagnostic Services Program’s recent decision to recommend coverage for the target’s Razor test. Furthermore, the purchaser has the option to acquire the remaining holding for USD 15.00 million in cash and scrips, with a further consideration of USD 3.00 million dependent on certain clinical trial targets being achieved. Razor’s parent company will also receive USD 4.00 million in cash upon achievement of a further CMS coverage milestone. Subject to customary closing conditions, the deal is expected to complete by the end of September. Headquartered in California, Razor develops tests used to identify the early stages of lung cancer for patients at a high risk of a recurrence of the disease. Its Clinical Laboratory Improvements Amendments-certified treatment stratification test, better known as the Razor test, allows people who are still responsive to adjuvant chemotherapy to be treated. Ron Andrews, chief executive of OncoCyte, said: “The addition of the Razor treatment stratification test for patients diagnosed with early stage lung cancer is a perfect downstream complement to our proprietary DetermaVu liquid biopsy test that we are developing to help manage CT [computed tomography]-identified lung nodules and thereby facilitate the early diagnosis of lung cancer.” The target’s shareholders will use USD 4.00 million of the proceeds to finance a supplemental clinical trial of the Razor test, while Oncocyte has agreed to fund clinical trial costs in excess of that sum. Based in California, the buyer focuses on developing non-invasive biopsy diagnostics used to detect the first stages of cancer. As of 30th June 2019, OncoCyte had total assets of USD 37.06 million. There have been 3,865 deals targeting companies who provide research and development for the physical, engineering and life sciences sector announced worldwide since the start of 2019, according to Zephyr, the M&A database published by Bureau van Dijk. Danaher agreed to acquire General Electric’s biopharma business for USD 21.40 billion, in the largest of these to date. Companies such as Tzar Aerospace Research Labs, Loxo Oncology and Auris Health were also targeted in this sector this year. © Zephus Ltd