ViroLogic and Aclara merge in $75m deal

ViroLogic and Aclara BioSciences have entered into a definitive merger agreement to create an industry-leading company to develop and commercialise advanced molecular diagnostics for personalised medicine focused on oncology and infectious diseases.

The combined company will leverage ViroLogic's commercial laboratory, patient testing and pharmaceutical drug development business, and innovative technology with Aclara's proprietary molecular assay platform known as the eTag system. With the benefit of technological and operational synergies and substantial financial resources, the combined company will seek to rapidly exploit the large emerging market opportunity for molecular testing for cancer and other serious diseases.

After the closing of the merger, ViroLogic expects to have approximately $75m in cash, cash equivalents and marketable securities net of estimated transaction and integration costs.

Building on its pioneering work in the HIV field, ViroLogic is merging with Aclara in order to deliver technology and services for pharmaceutical companies developing cancer therapeutics along with delivering patient testing products and services to aid doctors in the treatment of cancer patients.

'This merger provides what we believe is the most powerful new technology platform to address the exploding field of targeted therapeutics and molecular diagnostics for cancer,' said William Young, ceo and chairman of ViroLogic, who will continue as ceo and chairman of the newly merged company. 'This strong combination of capabilities and substantial financial resources will enable us to leverage our experience and infrastructure to bring the benefits of personalised medicine to the acute need in oncology. We have delivered hundreds of thousands of complex individual molecular evaluations to HIV patients in the last five years and we plan to leverage that expertise to bring expanded products and services to disease areas that affect at least 10 times as many patients. There are more than 1m new cancer patients in the US each year, representing a very significant patient care and market opportunity.'

'Joining forces with ViroLogic, the industry innovator and leader that helped make personalised medicine a reality in HIV for patients, healthcare providers and pharmaceutical companies will accelerate our ability to do the same thing for cancer, said Thomas Klopack, Aclara's ceo. 'We see the treatment of cancer developing in a similar fashion to that of HIV with potentially more effective combination regimens facilitated by molecular testing. ViroLogic's proven business model is a perfect fit with our aspiration to commercialise our molecular oncology testing technology. ViroLogic's growing revenue stream and established relationships with major pharmaceutical companies, payors and leading national distributors make them ideally suited to commercialise products and services derived from our proprietary eTag systems. Combining with ViroLogic at this time eliminates the need for Aclara to spend resources on building a commercial infrastructure and will accelerate the time-to-market for eTag products and services.'

ViroLogic and Aclara

ViroLogic has built a highly sophisticated and efficient commercial infrastructure to support the industry's most comprehensive line of drug resistance tests, including PhenoSense HIV, GeneSeq and its novel combination assay, PhenoSenseGT. These tests are used in the management of individuals with HIV and the development of new antiviral drugs for HIV and hepatitis. Since it launched PhenoSense HIV four years ago, the company has steadily increased revenues year on year while optimising operations. Aclara has developed the proprietary eTag System, a protein-based technology that can be easily formatted to test biopsy-sized samples of patient tumours. Importantly, this includes formalin-fixed paraffin-embedded tissue, the industry standard for storing patient samples. Many different molecular markers in these patient tissues can be quantified simultaneously, such as signaling proteins, protein complexes and activated receptors. The eTag system is particularly well suited for targeting the new molecular-based drugs being introduced for cancer. This will allow drug companies and doctors to assess a patient's likelihood of responding to a given therapy thereby facilitating more precise and effective utilisation of available therapeutic options. Aclara has a growing list of collaborations with academic institutions studying cancer and inflammation disorders.