Source: © Ljupco Smokovski/
Source: © Ljupco Smokovski/

Generex Biotechnology has agreed to acquire for $15 million a 51% majority equity interest in Hema Diagnostic Systems (HDS), but could reap up to $50 million in royalties from gross sales of HDS tests, the companies said today.

While saying it entered into a non-binding letter of intent for the majority stake in HDS, Generex cautioned that discussions between the companies are at an early stage, and the deal is pending valuation and other due diligence.

HDS has designed, engineered, and manufactured a series of new rapid diagnostic tests for infectious diseases that include hepatitis B, hepatitis C, malaria, HIV, tuberculosis, syphilis and dengue. As part of the deal, Generex will receive royalty payments on gross sales of HDS products. Those royalties will be capped at $50 million.

All HDS rapid tests are manufactured under GMP conditions and in accordance with ISO13485 guidelines, according to the company.

HDS is also developing new diagnostic tests for chikungunya and Zika Virus—as well as an anthrax test designed to detect both the protective antigen and the lethal factor in 15 minutes from a single drop of blood; and a fourth-generation HIV test designed to detect the presence of HIV in a patient weeks earlier than the current 3rd Generation diagnostic.

In addition, HDS has begun development of a new rapid whole blood Ebola test for in-field and clinical use, with the company citing relationships it has developed in West Africa.

Also, HDS is finalizing a new rapid tuberculosis (TB) assay that will not react to the Bacillus Calmette–Guerin vaccine, and based upon test results will become a triage test confirming the presence of the active/infectious form of m.tuberculosis in a test subject. Upon successful submission of data derived in a series of classified evaluations, the diagnostic will become the first accepted whole blood rapid test for the detection of m.TB in the active/infectious state, according to HDS.

The new TB and Ebola tests, as with the rapid tests, will use HDS’ RAPID 1-2-3® HEMA EXPRESS® system, designed to restrict the free flow of the blood sample by directing it onto an absorbent pad, then directly into a sealed transparent housing. The system virtually eliminates the need for transport of potentially infected blood from the in-field test site to the clinical lab, according to HDS.

HDS's rapid HIV assays have been approved by the U.S. Centers for Disease Control and Prevention (CDC) and are included on the USAID Blanket Waiver List. This enables organizations around the globe to procure the tests with funds under The U.S. President's Emergency Program for AIDS Relief, known as PEPFAR. HDS is also a supplier of product to The Global Fund and to The Partnership for Supply Chain Management.

“We believe that the HDS infectious disease detection technologies can form a synergistic adjunct to the Antigen Express proprietary infectious diseases vaccine platform technology, with prospects for efforts on the Ebola virus as well as avian and swine influenzas, where Antigen Express has already undertaken clinical work, creating new and expanded market opportunities for us both,” HDS President and CEO Lawrence Salvo said in a statement.

Generex develop immunotherapeutic vaccines for malignant, infectious, allergic, and autoimmune diseases through its Antigen Express wholly-owned subsidiary, which has pioneered the use of specific CD4+ T-helper stimulation technologies in immunotherapy. One technology focuses on modification of peptides with Ii-Key to increase potency, while a second relies on inhibition of expression of the Ii protein.

“We look forward to embarking on this exciting new endeavor, an opportunity to leverage the scientific work already undertaken by Antigen Express in vaccines for infectious diseases and to access the presence and experience of Hema Diagnostic Systems in the international marketplace,” added Mark Fletcher, Generex’s president and CEO.

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