Gene Logic sells genomics assets

US-based drug developer Gene Logic has agreed to sell its Genomics assets to R&D enabling company, Ocimum Biosolutions.

Per the agreement, Gene Logic will exchange its genomics assets to US-headquartered Ocimum for USD 10m in cash, of which USD 7m will be paid at closing and USD 3m payable following the publishing of a promissory note due 18 months from the date of closing.

Gene Logic will retain full permanent rights to use the existing information databases of its former genomics business as key elements in building its emerging drug repositioning and development business. The company will also retain specified assets related to molecular diagnostics and will continue to explore strategic alternatives for these assets.

Aquilo Partners acted as financial advisor to Gene Logic in this transaction. Ocimum will assume certain liabilities associated with the Genomics assets and business.

The sale is subject to certain conditions, including the approval of the Gene Logic shareholders who will be asked to authorise this transaction at a special meeting to be held for that purpose.

Gene Logic's decision to sell its genomics business, it says, was prompted by a comprehensive review assisted by its investment bankers over several months to identify and evaluate a range of alliance or sale alternatives.

Gene Logic's development work is focused now on its clinical stage small molecule drug candidate, GL1001. The company has repositioned GL1001 to treat gastrointestinal disease, and will manufacture a research grade drug supply. It will then file an Investigational New Drug (IND) application, so additional clinical trials can be conducted in the US.

Gene Logic has refined its indication-seeking programme for GL1001, in addition to certain compounds provided to the company by its partners. The company says its has reported one new hypothesis for every three compounds introduced for evaluation to Pfizer, Roche, Abbott, Merck Serono, Organon, Solvay, and Lundbeck.

Charles L Dimmler III, CEO of Gene Logic, said: ìThe sale represents the culmination of a rigorous assessment of the company's business strategy undertaken in 2006 and that led, as a first step, to the sale of the preclinical division. It enables the company now to concentrate its proprietary know-how in this newly emerging segment of drug development, a business the company believes will produce great value potentially for our shareholders.î