TORONTO, May 19, 2015 (GLOBE NEWSWIRE) -- GeneNews Limited (TSX:GEN) ("GeneNews" or the "Company") today announced that it has entered into a Purchase Agreement (the "Purchase Agreement") with Cobalt Healthcare Consultants, Inc. ("Cobalt") and Health Diagnostic Laboratory, Inc. ("HDL"), pursuant to which GeneNews and Cobalt acquired HDL's thirty-three and one third percent (33 1/3%) ownership stake in their Innovative Diagnostic Laboratory, LLP ("IDL") joint-venture for an aggregate purchase price of US$4.0 million.
Combined with their prior investments in IDL, GeneNews and Cobalt now each own a 50% equity interest in the joint-venture.
The purchase price payable by each of GeneNews and Cobalt for their purchase of units of IDL from HDL is to be satisfied in part with each company issuing a one-year secured promissory note (the "Notes") in the principal amount of US$1.0 million, to HDL, with the balance of the purchase price to be paid as US$1.0 million, in cash, by each company. The Notes will accrue interest until maturity at a rate of 2% per annum. The purchase agreement also contains customary representations and warranties and indemnification provisions.
"While GeneNews will continue to contribute to its growth through internal pipeline development, third-party licenses and potential acquisitions of novel, proprietary tests, increasing our ownership interest in IDL will provide us with greater management and cost control, more direct input and a higher share of the joint-venture's economics," commented Mr. Howard-Tripp. "In fact, it is our intent to increase our ownership even beyond what was achieved through this transaction, if that opportunity should present itself in the future."
"As we move forward, with vital functions successfully brought in-house, our focus can now be on expanding IDL's sales effort by re-establishing growth trends of existing tests, adding additional novel, proprietary tests to our offering menu, and continuing to improve revenue collections," said Mr. Howard-Tripp.
About GeneNews
GeneNews is focused on developing and commercializing proprietary molecular diagnostic tests for the early detection of diseases and personalized health management, with a primary focus on cancer-related indications. The Company's lead product, ColonSentry®, is the world's first blood test to assess an individual's current risk for colorectal cancer. In 2013, GeneNews created a U.S. joint venture, Innovative Diagnostic Laboratory, LLP ("IDL"), that it is committed to help become a leader in molecular diagnostics and personalized medicine, serving as a strong commercialization outlet for advanced cancer tests. Taking a multi-view approach to the diagnosis and treatment of cancer, IDL is working to assemble, through a combination of internal pipeline development, third-party licenses and potential acquisitions, a robust menu of novel, proprietary tests to be offered by it throughout the United States. GeneNews' common shares trade on the Toronto Stock Exchange under the symbol 'GEN'. More information on GeneNews and IDL can be found at www.GeneNews.com and www.MyInnovativeLab.com, respectively.
Forward-Looking Statements
This press release contains forward-looking statements identified by words such as "expects", "will" and similar expressions, which reflect the Company's current expectations regarding future events, including the launch of ColonSentry® test across the United States and the assembling of a robust menu of other advanced cancer tests to be offered by IDL. The forward-looking statements involve risks and uncertainties, including market reaction to the launch of the ColonSentry® test into new regions, that could cause the Company's actual events to differ materially from those projected herein. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements, except as required by law.