Glycominds to buy Savyon Diagnostics

Glycominds is just launching its diagnostics products, while Savyon has a production plant and sales.

Sources inform ''Globes'' that Glycominds Ltd. is about to acquire Savyon Diagnostics Ltd. for $8 million. Glycominds CEO Dr. Avinoam Dukler confirmed that the company had signed a term sheet for the acquisition, but declined to provide further details.

Both companies develop diagnostic solutions. Glycominds has developed technology based on glycomics (sugars), while Savyon has developed and markets a range of test kits, including for sexually transmitted diseases and respiratory tract and urinary tract infections.

The market was surprised by the acquisition, and wondered why Glycominds, which is only at the initial launch stage and has not held any large financing rounds lately, could acquire Savyon, which has a production plant and regular sales. The answer is that whereas Savyon represents the diagnostic present, Glycominds may represent the future.

Savyon produces a wide range of diagnostic kits, but faces a competitive market that is going generic. Glycominds has innovative and proprietary technology that will make possible the development of new tests. It will have to persuade the market that its tests are effective and worth the price that it will charge. Glycominds will presumably hold a financing round soon to finance the acquisition of Savyon, or alternatively, the takeover will be in the form of a share swap.

Savyon was founded in 1984 and was part of Healthcare Technologies, which earlier this year switched to cleantech and changed its name to NexGen Biofuels Inc. (Nasdaq: NXGN). Savyon split into two units in 2003, one of which stayed with Healthcare, and the other became the current company. Dr. Martin Lee, the founder of Great Smokies Diagnostic Laboratory Inc. (now Genova Diagnostics Inc.), acquired the spin-off in 2006. He told "Globes" that Savyon has $5-6 million revenue a year.

Glycominds' innovative diagnostic technology identifies glycan (blood sugar) biomarkers for a new class of novel blood tests which allow physicians to detect cancer earlier, predict autoimmune disease progression and decide on therapy regimen. The company's products are IBDX, a blood test for Inflammatory Bowel Disease diagnostics and Crohn's Disease; and gMS a blood test to distinguish early-stage multiple sclerosis from similar autoimmune diseases.

Glycominds' primary market is the US, where both products are marketed through laboratories. The company believes that it will achieve substantial sales only after obtaining US Food and Drug Administration (FDA) certification.

Glycominds planned to go public on the Tel Aviv Stock Exchange (TASE) in 2005, the first biomedical company to do so, but withdrew its plans at the last moment.

Published by Globes [online], Israel business news - www.globes-online.com - on August 21, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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