Cancer Genetics, Inc. Announces Strategic Transactions
16 July 2019 - 6:22AM
Cancer Genetics, Inc. (Nasdaq: CGIX), a leader in enabling
precision medicine for immuno-oncology and genomic medicine through
molecular markers and diagnostics, today announced the sale of its
BioPharma business. The Company’s junior secured lender, Partners
for Growth IV, L.P. (“PFG”) conducted a consensual private
foreclosure of the assets relating to the Company’s BioPharma
business under Article 9 of the Uniform Commercial Code and sold
them to Interpace Diagnostics Group Inc. (Nasdaq: IDXG). The gross
purchase price is $23.5 million in addition to the assumption by
IDXG of approximately $5 million of liabilities relating to the
BioPharma business, before working capital and closing adjustments.
IDXG paid PFG $13.8 million in cash at closing.
IDXG also issued a promissory note to CGIX in the amount of $7.7
million, subject to certain post-closing adjustments. The note is
due upon the approval by IDXG’s shareholders, and subsequent
consummation, of an investment by Ampersand Capital Partners in
IDXG, which was simultaneously announced by Interpace in
conjunction with this transaction. In addition, IDXG is assuming
approximately $5 million of CGI liabilities related to the
Biopharma business. As part of the Article 9 transaction, PFG has
extinguished its junior secured debt and fully retired the
Company’s senior secured loan to Silicon Valley Bank. PFG has
remitted approximately $2.3 million in cash to CGIX which CGIX
intends to use to settle other liabilities of the Company.
Separately, on July 8, 2019, the Company
consummated the sale of the assets used in its clinical laboratory
business to siParadigm LLC, a leading specialty reference
laboratory with expertise in hematopathology and oncology
diagnostics, for an initial payment of approximately $1 million,
plus an earn-out based on future testing volume from certain
clinical laboratory customers over the next 12 months.
Following these transactions, the Company
continues to own and operate its Discovery business, which it
obtained through the acquisition of vivoPharm in 2017. vivoPharm
offers proprietary preclinical test systems supporting clinical
diagnostic offerings at early stages, valued by the pharmaceutical
industry, biotechnology companies and academic research
centers.
About Cancer Genetics, Inc.
Through the acquisition of vivoPharm in 2017,
the Company’s wholly owned subsidiary, vivoPharm, offers
proprietary preclinical test systems supporting clinical diagnostic
offerings at early stages, valued by the pharmaceutical industry,
biotechnology companies and academic research centers. vivoPharm
specializes in conducting studies tailored to guide drug
development, starting from compound libraries and ending with a
comprehensive set of in vitro and in vivo data and reports, as
needed for Investigational New Drug filings. The Company reported
revenue from its Discovery business of $5.2 million for the full
year 2018 and $1.5 million in Q1 2019.
Forward-Looking StatementsThis
press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements pertaining to Cancer Genetics, Inc.’s expectations
regarding future financial and/or operating results, potential for
our tests and services and future revenues or growth in this press
release constitute forward-looking statements.
Any statements that are not historical fact
(including, but not limited to, statements that contain words such
as “will,” “believes,” “plans,” “anticipates,” “expects,”
“estimates”) should also be considered to be forward-looking
statements. Forward-looking statements involve risks and
uncertainties, including, without limitation, risks with respect to
our ability to collect on future income streams and settle with our
creditors, risks with respect to our ability to successfully
operate the Discovery business, risks with respect to our need and
ability to obtain future capital to satisfy our obligations to our
lenders and creditors, risks inherent in the development and/or
commercialization of potential tests, risks of cancellation of
customer contracts or discontinuance of trials, risks that
anticipated benefits from the transactions described herein will
not be realized, uncertainty in the results of clinical trials or
regulatory approvals, uncertainties with respect to evaluating
strategic options, maintenance of intellectual property rights,
risks with respect to maintaining our listing on Nasdaq, and other
risks discussed in the Cancer Genetics, Inc. Form 10-K for the year
ended December 31, 2018 and Form 10-Q for the quarter ended March
31, 2019, along with other filings with the Securities and Exchange
Commission. These forward-looking statements speak only as of the
date hereof. Cancer Genetics, Inc. disclaims any obligation to
update these forward-looking statements.
Investor Contacts:Carol Ruth
The Ruth GroupTel: 646-536-7004Email: cruth@theruthgroup.com
Media Contact:Kirsten ThomasThe
Ruth GroupTel: 508-280-6592Email: kthomas@theruthgroup.com
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