Mirina, the new entity, gained Nanogen’s technology that aims to enhance miRNA drugs.
Nanogen and The Elitech Group entered a definitive merger agreement. Separately, Nanogen also created a technology spinout firm called Mirina. The new entity will leverage Nanogen’s minor groove binder (MGB) technology in developing miRNA therapeutics.
In conjunction with this merger, Nanogen also entered into interim funding deals with Elitech and certain existing Nanogen investors pursuant to which they will loan Nanogen $8 million to fund its operations during the period between signing and closing of the combination.
The combination of Nanogen and The Elitech Group is structured as a tax-free stock-for-stock exchange. It will create a global provider of products to the molecular, clinical chemistry, microbiology, and point-of-care diagnostics markets.
The transaction is expected to close by the end of the first quarter of 2009. The expected first-year revenues will exceed $150 million, according to the companies. Nanogen expects the combination to be substantially accretive to 2009 GAAP earnings per share, excluding one-time transaction-related adjustments and costs.
The transaction brings together Nanogen’s technology in molecular and point-of-care diagnostics with The Elitech Group’s global manufacturing, sales, and distribution infrastructure in the clinical chemistry and microbiology markets.
As per the funding transaction, Nanogen will issue senior secured convertible promissory notes.
Additionally, Mirina exclusively licensed the MGB platform from Nanogen. This technology reportedly makes miRNA therapeutics with enhanced properties. It can create oligonucleotides appended with MGB agents, chemical groups that have high affinity for helical DNA or RNA.