Transgenomic, Inc. has entered into a definitive and binding term sheet to divest its Genetic Assays & Platforms (GAP) business unit to ADSTEC Corporation, a privately held Japanese company that manufactures and sells specialized instruments and reagents for the biotechnology industry.
Pursuant to the term sheet, Transgenomic agreed to transfer rights to its GAP products, licenses, technology, know-how and trademarks, along with associated product inventory, to ADSTEC. Transgenomic’s GAP business unit employees and sites, including Glasgow, UK, and Irvington, Nebraska, should be transitioned to ADSTEC, subject to compliance with local laws. Pursuant to the binding term sheet, ADSTEC will assume the business, financial and human resource commitments of the GAP business unit without payment to Transgenomic; however, it is anticipated that ADSTEC will pay Transgenomic US $300,000 for existing stock and inventory related to the GAP business unit. The divestiture of the GAP business unit is anticipated to reduce Transgenomic’s quarterly expenses by approximately $1.2 million. The transaction is scheduled to close by the end of October.
Paul Kinnon, president and chief executive officer of Transgenomic, commented, “The Genetic Assay and Platforms business unit contains our major remaining legacy business. This business unit has required significant management and employee time and focus, which we and the Board of Directors believe will be better invested in growing our high-potential products for molecular diagnostics and precision medicine, based on our highly innovative ICE COLD-PCR™ technology and state-of-the-art expertise.”
Mr. Kinnon continued, “We are divesting this business unit to Japanese instrumentation producer ADSTEC, which supplies the GAP unit’s Hanabi product line and which we believe is well-positioned with the existing infrastructure and resources to succeed. We expect that this transaction will ensure continuing service to existing GAP customers and ongoing employment to our GAP unit workers, while allowing us to focus solely on our strategic initiatives. Following the closing of the transaction, we expect to dedicate all of our corporate resources on growing our high potential molecular diagnostics products and services and accelerating commercialization of our MX-ICP technology for liquid biopsies and precision medicine.”