Medical Device Dailys
In a bid to meld diagnostics with pharmacogenomics, Clinical Data (Newton, Massachusetts) is taking over Genaissance Pharmaceuticals (New Haven, Connecticut), in an all-stock deal valued at about $56 million.
“Clinical Data understands the marketplace and the approvals process, and that’s a key thing for us at this point,” Kevin Rakin, president and CEO of Genaissance, told Medical Device Daily’s sister publication, BioWorld Today, limiting his remarks a bit due to legal concerns pending the filing of a proxy statement related to the deal. He did say that by “putting the companies together, we have greater heft and substance.”
Clinical Data offers blood chemistry instruments and diagnostic assays to clinics and small hospitals. The combined firm would sell pharmacogenomics services to pharmaceutical, biotech and agricultural markets.
Under the merger terms, unanimously approved by the boards of both companies, Genaissance stockholders would get, at a fixed exchange ratio, 0.065 shares of Clinical Data common stock for each share of Genaissance’s common stock. Based on the two firms’ closing prices Monday, the amount represents a price of $1.33 a share of Genaissance common stock.
Genaissance’s preferred shareholders would exchange their shares for Clinical Data preferred shares, and when the deal closes – expected in 4Q05 – Genaissance’s common and preferred shareholders would own about 40% of the combined company.
With two molecular diagnostic tests on the market, Genaissance also has work ongoing in the areas of central nervous system disorders and cardiovascular disease. Last fall, the firm acquired an exclusive worldwide license from Merck (Darmstadt, Germany) to develop and commercialize the Phase II small molecule vilazodone, a selective serotonin reuptake inhibitor and a 5HT1A partial agonist for depression.
That deal provided Genaissance with a lead compound, and the company said it would know within two years whether it could move vilazodone into Phase III trials. The compound operates by way of a different mechanism of action than other drugs for depression and anxiety. A pharmacogenomic-based compound will do better for patients than available treatments, which provide initial relief of depression only in about 50% of those dosed, the firm says.
Genaissance’s strategy involves in-licensing drug candidates, a la the Merck compound, and then finding genetic markers to identify a responsive patient population.
“We’re developing next-generation diagnostics and ‘theranostics,’” Rakin said. “That’s the main strategic goal here, and all of our research and development efforts fall under that umbrella.”
The firm’s broad-ranging investigations include the finding late last year of genetic markers that might predict whether schizophrenics under treatment are at risk for developing clozapine-induced agranulocytosis. Data from the study might apply to other drugs that affect white blood cell counts and require frequent blood testing, Genaissance said.
Genaissance board members Rakin and Joseph Klein would join Clinical Data’s board, along with Burton Sobel, professor of biochemistry at the University of Vermont (Burlington), bringing board membership to seven.
In other dealmaking activity, Pediatrix Medical Group (Sunrise, Florida), a physician group practice focused on neonatal and maternal-fetal critical care, reported the acquisition of a neonatal physician group practice based in Baton Rouge, Louisiana.
The acquired practice provides critical care services to ill and premature newborns at Baton Rouge General Hospital’s Level III, 12-bed neonatal intensive care unit (NICU) that has annual patient volume that exceeds 3,000 NICU patient days. The practice also provides well-baby services to babies admitted to the hospital.
Pediatrix paid cash for the practice and said it expects the transaction to be accretive to its earnings.