Cancer diagnosis company Rosetta Genomics Ltd. (Nasdaq:ROSG) announced over the weekend that it had been sold for $10 million to private US company Genoptix, a company in the same sector. The deal includes Genoptix paying Rosetta Genomics' debt, and the share price for the deal will therefore be $0.60, the price at which the share opened trading on Friday, when the announcement was made. The share price fell in Friday's trading, driving the company's market cap down to $2.8 million.
Rosetta Genomics was regarded as the great hope of Israeli biotechnology in the years following 2000, when many elements of the genome, then referred to as junk DNA, were decoded. It became clear that these genes were in no way junk; they served as a control mechanism for other genes - "encoded genes." The encoded gene defines which protein will be created in the body, but an entire system of controller genes determines under which conditions, and how many. This discovery was dramatic in human genetics research, and Rosetta Genomics played a significant role in the decoding process, registering many patents for these erstwhile ostensibly "junk" genes.
The company raised $2 million when it was still a private company from Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) and Mori Arkin, among others. Its scientific committee included Nobel Prize winner Prof. Aaron Ciechanover and Copaxone inventor Prof. Michael Sela. Translating this revolution into products, however, proved more difficult.
Because of the many years developing such products was likely to require and the problems that began to surface in drugs based on DNA and RNA manipulation, the solution of which is only now beginning, Rosetta Genomics decided to lower its sights and focus on diagnosis, instead of treatment. Specifically, the company specialized in diagnosis that distinguished between different types of cancer through the RNA active in certain cancer cells. The company conducted a modest IPO on Nasdaq in 2007, raising $26 million at a company value of $79 million. It launched a number of tests, but ran into problems in the acquisition of a laboratory in which to perform its tests. Rosetta Genomics sold the laboratory and built its own, got into liquidity problems and overcame them, all the while failing to generate substantial revenue. Rosetta Genomics has raised $74 million to date on Nasdaq, but its share has lost 90% of its value since its IPO. The company had only $900,000 in revenue in its most recent quarter, which was one of its peak quarters. Early on, Rosette Genomics split off its plant activity, a maneuver similar to the way Evogene was split off from Compugen Ltd. (Nasdaq: CGEN; TASE: CGEN). Rosetta Green, which utilized genome knowledge in order to improve plants, was sold for $35 million to Monstanto after being listed on the TASE for a short time. In its struggle for survival, Rosetta Genomics burned its proceeds from the sale of its share in the subsidiary.
Published by Globes [online], Israel Business News - www.globes-online.com - on December 17, 2017
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