Transgenomic and Precipio Diagnostics Announce Planned Merger

- October 13th, 2016

Transgenomic and privately-held Precipio Diagnostics today announced entry into a merger agreement, pursuant to which Precipio will become a wholly owned subsidiary of Transgenomic, and Transgenomic will be renamed Precipio.

Transgenomic, Inc. (NASDAQ:TBIO), and privately-held Precipio Diagnostics, LLC today announced entry into a merger agreement, pursuant to which Precipio will become a wholly owned subsidiary of Transgenomic, and Transgenomic will be renamed Precipio, Inc. In connection with the merger, it is anticipated that the original Precipio security holders will receive between 62% and 80% of the outstanding shares of the combined company, depending on the relative amount of outstanding liabilities of the parties at closing and prior to the investment of new capital. The merger is expected to close in 2016, pending approval by Transgenomic shareholders and other closing conditions set forth in the merger agreement. Simultaneous to the merger, the combined company will
receive an investment of up to $7 million from a syndicate led by BV Advisory Partners in a private placement of preferred convertible securities, and $3.0 million of outstanding debt of each company is expected to convert into this same class of preferred convertible securities. This comprehensive transaction will provide the Company with
a clean balance sheet and sufficient capital to achieve its planned expansion.
Transgenomic has filed to complete a reverse stock split of between
one-for-ten and one-for-thirty before the merger closes, and the
company’s outstanding debt is expected to convert into common and
preferred shares. The companies expect that shares of the combined
company will be listed on the NASDAQ exchange and trade under the “PRPO”
ticker (subject to filing and approval by NASDAQ). The merger agreement
provides that, Ilan Danieli, Precipio founder and Chief Executive
Officer, will serve as the Chief Executive Officer of the combined
company. BV Advisory Partners is acting as advisor to the transaction.
Paul Kinnon, Transgenomic President and Chief Executive Officer, said
“In recent years we have transitioned from a provider of conventional
life science tools and diagnostic services into an innovative
biotechnology enterprise focused on advancing precision medicine. We
have done this through our revolutionary ICE COLD-PCR (ICP) technology,
which enables accurate, non-invasive tumor profiling using circulating
DNA in patient plasma. We have established a solid platform for
commercialization of ICP, with leading global distributors and a solid
pipeline of potential agreements with partners and customers. This is a
good time to join forces with Precipio, which shares our commitment to
accurate and timely advanced cancer diagnostics and has established an
impressive infrastructure of academic experts and a growing customer
base, validated by successful case studies. I look forward to working
with my new colleagues to ensure a successful transition.”
Ilan Danieli, Precipio founder and Chief Executive Officer, said “We are
proud of Precipio’s progress in building a growing platform that
provides unique services to cancer patients and their physicians by
providing a demonstrated superior level of diagnostic accuracy, ensuring
that patients receive the best possible treatment. Cancer misdiagnosis
is an all too common and underappreciated problem, which frequently has
a negative impact on patient treatment, and may cause needless loss of
life. We provide both primary and second opinion screening, and our
network of leading academic cancer researchers and advanced diagnostic
technologies have proven to be an invaluable resource for patients and
physicians. Our entire team is committed to ensuring that our services
are made widely available. To that end we will continue building out our
sales team to accelerate adoption and revenue growth. We believe
Transgenomic’s ICP technology and commercial infrastructure fit well
with our values and our business model, and look forward to this next
stage of growth, as we work together to integrate our teams,
technologies and services.”
Keith Barksdale, Founder of BV Advisory Partners, commented,
“Transgenomic and Precipio have complementary strengths with the
potential to be a dynamic and strong competitor in the rapidly growing
market for advanced cancer diagnostics. ICP is a revolutionary mutation
detection technology that is now available through global distributors,
and adoption by drug researchers and developers is ramping up. The
technology is also available to help guide cancer diagnosis and
treatment through Transgenomic’s CLIA laboratory. Precipio’s platform of
leading academic cancer experts provides superior diagnostic accuracy
level to oncologists and their patients; it represents a unique resource
that can benefit from and leverage the power of ICE COLD-PCR. We look
forward to working with the combined company going forward to help
assure its growth and success.”
Transgenomic’s ICE COLD-PCR offers major advantages over current
sequencing technologies. It delivers at least a 100-fold improvement in
sensitivity compared to standard methodologies, allowing detection of
both known and previously unknown genetic alterations in any exon of any
gene using a single assay. It is robust, easy to use and easily
implemented, requiring minimal disruption to established sequencing
workflows. It is available as ICEme™ Kits that deliver up to a 500-fold
increase in mutation detection compared to most current methods, with
levels of detection routinely achievable down to 0.01%. This ultra-high
sensitivity enables detection of low level mutations and allows accurate
patient monitoring as well as stratification of cancer sub-populations.
ICEme Kits are compatible with most patient samples, including tissue,
blood, plasma, urine and other biofluids. The kits are simple to use and
work with most of the genomic analysis platforms available in
laboratories today. They are easily customizable for use with single
mutations or multiple mutations in combination. The current menu
includes approximately 20 clinically relevant, actionable mutations that
are associated with important cancers. The ICP range of mutation targets
is being expanded on an ongoing basis.
ICE COLD-PCR was originally developed by the laboratory of Dr. Mike
Makrigiorgos at the Dana-Farber Cancer Institute, which has exclusively
licensed rights to the technology exclusively to Transgenomic.
About Transgenomic
Transgenomic,
Inc.
is a global biotechnology company advancing personalized
medicine in oncology and inherited diseases through advanced diagnostic
technologies, such as its revolutionary ICE COLD-PCR, which enables use
of liquid biopsies for mutation detection. The company also provides
specialized clinical and research services to biopharmaceutical
companies developing targeted therapies. Transgenomic’s diagnostic
technologies are designed to improve medical diagnoses and patient
outcomes.
About Precipio
Precipio Diagnostics has built a platform to harness the intellect,
expertise and technology developed within academia, delivering quality
diagnostic information to physicians and patients worldwide. Through its
collaborations with world-class academic institutions specializing in
cancer research, diagnostics and treatment, and its experience
delivering quality service, Precipio Diagnostics offers a new standard
of diagnostic accuracy enabling the highest level of patient care. For
more information, visit www.precipiodx.com.
About BV Advisory Partners
BV Advisory Partners is a strategic advisory firm focused on value
creation. BV is active in Strategic Investing, M&A Advisory, Business
Development, Consulting, Sales, Distribution and IP Creation of cutting
edge technologies. BV has a multi-sector focus (Technology, Sports &
Entertainment, Healthcare, Environmental Services & Consumer Goods) and
is committed to partnering with businesses that create sustainable
value for the broad global community. BV
bridges the gap between middle-market companies and investors
looking for sustainable business models by providing services throughout
the entire life-cycle for its partners. BV’s approach
leads to significant repeat business from its clients. BV’s principals
leverage their personal and professional networks to bring
value to partners. BV’s extensive network of partners
provide clients with industry-specific guidance and global business
development execution capabilities. For more information, visit www.bvadvisorypartners.com.
Forward-Looking Statements
Certain statements in this press release constitute “forward-looking
statements” of Transgenomic within the meaning of the Private Securities
Litigation Reform Act of 1995, which involve known and unknown risks,
uncertainties and other factors that may cause actual results to be
materially different from any future results, performance or
achievements expressed or implied by such statements. Forward-looking
statements include, but are not limited to, those with respect to
management’s current views and estimates of future economic
circumstances, industry conditions, company performance and financial
results, including the ability of the Company to grow its involvement in
the diagnostic products and services markets, expectations regarding new
clients, projects and prospects, and MX-ICP’s ability to accelerate the
Company’s growth and generate revenue. The known risks, uncertainties
and other factors affecting these forward-looking statements are
described from time to time in Transgenomic’s 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.
Accordingly, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995 with respect to all statements contained
in this press release. All information in this press release is as of
the date of the release and Transgenomic does not undertake any duty to
update this information, including any forward-looking statements,
unless required by law.

Additional Information for Transgenomic Common Stockholders
In connection with the proposed transactions, Transgenomic plans to file
with the SEC a proxy statement relating to the approval of the merger
agreement. The information in the preliminary proxy statement is not
complete and may be changed. The proxy statement and this press release
are not offers to sell Transgenomic securities and are not soliciting an
offer to buy Transgenomic securities in any state where the offer and
sale is not permitted.
The definitive proxy statement will be mailed to stockholders of
Transgenomic. TRANSGENOMIC URGES INVESTORS AND SECURITY HOLDERS TO READ
THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of the
definitive proxy statement (when available) and other documents filed
with the SEC by Transgenomic through the web site maintained by the SEC
at www.sec.gov.
Free copies of the definitive proxy statement (when available) and other
documents filed with the SEC can also be obtained on Transgenomic’s
website at www.transgenomic.com/ir/investor-information/.
Transgenomic and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the stockholders of
Transgenomic in connection with the merger. Information about the
directors and executive officers of Transgenomic is set forth in
Transgenomic’s proxy statement filed with the SEC on April 29, 2016.
Additional information regarding the interests of these participants and
other persons who may be deemed participants in the Merger may be
obtained by reading the proxy statement regarding the proposed
transaction when it becomes available.
This document will not constitute an offer to sell or the solicitation
of an offer to buy any securities, nor will there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction. No offering of securities will
be made, except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act.

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