ExonHit eyes RedPath for $22.5M
Gaithersburg biotech's parent would acquire Pittsburgh company
ExonHit Therapeutics of Paris plans to pay $22.5 million in cash and stock for a Pittsburgh diagnostics company that will be brought under the wing of ExonHit's U.S. operations, whose headquarters are in Gaithersburg.
The purchase of privately held RedPath Integrated Pathology, which focuses on developing and marketing genomics-based diagnostic tests for cancer, will broaden ExonHit's commercial presence in the U.S., according to an ExonHit statement.
"The acquisition of RedPath is a significant milestone in ExonHit's strategy to become an internationally recognized player in molecular diagnostics," Loïc Maurel, president of ExonHit, said in the statement. "This transaction will strengthen our presence in the USA, which represents 55 percent of the multi-billion dollar molecular diagnostics market."
RedPath has developed and markets PathFinderTG, a molecular diagnostic assay for pancreatic cancer and is launching another to differentiate primary from metastasis tumors. It also has two programs in late-stage development and several in earlier stages. Its major investors include NewSpring Health Capital.
RedPath has about 35 employees, plus a national sales force of seven that the company is growing, according to Michael Carelli, senior product manager. About a dozen workers are involved in lab activities and support, he said.
Downsizing is not expected, he said.
"The current indications are that both facilities will continue and we're looking at this as an opportunity to expand certainly in Pittsburgh and for establishing a collaboration between Gaithersburg and Pittsburgh," Carelli said Monday. He declined to disclose revenues.
The deal, if approved by ExonHit shareholders, includes an upfront payment of $12.5 million in cash and $10 million in stock. Also, starting in 2012, ExonHit would pay up to $9.5 million, based on hitting sales targets, to RedPath's current stockholders. ExonHit executives said they expect the deal to close by mid-July.
ExonHit uses its technology, based on the analysis of alternative RNA splicing, to develop molecular diagnostic tests and therapeutics for neurodegenerative and cancer indications, according to its website.
The company, with 65 employees, was founded in Paris in 1997. It opened its North American headquarters and research labs in Gaithersburg in 2002. Three years later, it went public. Among its major shareholders is venture capital firm Oxford Bioscience Partners Group.
Based on Monday's exchange rates, ExonHit in March reported a net loss of $10.3 million in 2009, with revenues of $6.5 million.
ExonHit in Gaithersburg did not immediately return phone calls Monday seeking comment.
Correction: The original version of this report misstated the total acquisition price. The price is $22.5 million in cash and stock.