Gene expression analysis expert Exiqon is to pay up to $45m (€30.7m) for diagnostics company Oncotech as a first step towards becoming a world leading miRNA diagnostic manufacturer.
The acquisition rounds-off an eventful year for Exiqon, which saw the company raise around €320m during its initial public offering (IPO) on the Nordic Exchange earlier this year.
The all-share acquisition of Oncotech for around €31m will enable Exiqon to combine its highly sensitive locked nucleic acid (LNA) oligonucleotide probe technology and microarray platforms with Oncotech's expertise in developing nucleic acid-based diagnostic tests using its bank of tumour samples.
The 2007 market for nucleic acid-based diagnostics within the oncology arena has been estimated by various market research reports to be worth approximately $450m and growing at around 48 per cent a year.
Part of the reason for this growth is that as many as two thirds of those patients treated with chemotherapies do not respond to them due to drug resistance and being able to test for this before administering expensive drugs would be a huge benefit to both patients and healthcare systems.
Oncotech's leading product, the Extreme Drug Resistance (EDR) assay for identifying drug resistance for cancer patients has an 80 per cent share of the US market and the acquisition has been welcomed by Frank Kiesnar, CEO of Oncotech.
"Exiqon's state-of-the-art miRNA tools will allow Oncotech to identify molecular templates in a manner heretofore not possible," said Kiesnar.
"The combination of their miRNA tools with our knowledge of cancer drug mechanisms of action will allow the combined companies to identify new molecular diagnostic tests to improve patient response and survival. We will work together to create a new era."
The use of Oncotech's extensive tumour bank and paraffin embedded samples will enable Exiqon to develop molecular diagnostic tests that test for altered miRNA expression levels in tumour samples.
miRNAs have been shown to have a surprisingly widespread effect on gene regulation, with some studies indicating they may regulate more than 30 per cent of the human genome.
Earlier this year , researchers found that three miRNA molecules play an important part in regulating the p53 tumour suppressor network, suggesting new approaches for the diagnosis and treatment of various cancers.
Because miRNAs are only present in tiny amounts in the body they can be difficult to detect using standard systems, making the use of Exiqon's LNA probe technology that binds very strongly to RNA and DNA targets highly desirable.
The company aims to have its first molecular diagnostic test based on miRNA biomarkers launched within the first 12 months following completion of the acquisition and is confident that the transaction will not compromise its financial goal of reaching profitability by 2011.
The merged company will have in excess of 200 employees located around the world with 60 per cent of its employees located in the US, from which it expects to generate between 60 and 70 per cent of its revenues.