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Axela’s acquisition of Xceed Molecular hits snag
TORONTO— Subsequent to a news release dated July 26—and further planned promotion of the new company via its booth at the recent American Association of Clinical Chemistry (AAAC) annual meeting, a companion press conference and poster presentation on colorectal cancer expression profiling using a novel microarray technology—Axela Inc. has delayed its plans to acquire Xceed Molecular.
The official word on this deal as of press time, according to Axela's new president, David Deems, is that it is on hold. The transaction would have married Axela, a developer of systems for multiplex protein biomarker testing in clinical research and diagnostics, with Toronto neighbor Xceed Molecular, a molecular diagnostics firm. Financial terms of the acquisition have not been disclosed.
Unofficially, financing of the acquisition was said to have hit a snag. To date, VenGrowth Private Equity Partners Inc. has been Axela's major investor and is represented on the company's seven-person board of directors. VenGrowth notes on its website that the economic recession has had a profound impact on the ability of the fund to sell promising investments.
"Not a single Canadian life sciences company has been able to complete an IPO since October 2007," VenGrowth states. "Similarly, M&A activity involving Canadian life sciences companies has decreased dramatically. A more bullish sentiment amongst investors and strategic acquirers alike is required before stronger exit markets will prevail for private companies."
Axela provides systems that multiplex protein biomarker testing in clinical research and diagnostics. It currently features the award-winning Xceed Molecular Ziplex System for gene-expression analysis.
Plans for the expanded company called for it to offer clinical researchers a comprehensive suite of products for enhanced analysis of proteins, pathogens, DNA and RNA to speed validation and clinical application of biomarkers.
In its July 26 acquisition announcement, Deems stated that, "blending Axela's existing research focus with Xceed's diagnostic programs greatly expands the reach of the new company. The complementary technologies and content are already well positioned to improve diagnostics in infection, cancer and other immune-related diseases. Axela will continue the validation program for Xceed's Breast Cancer Prognostic Assay, a gene-expression signature designed to predict risk of recurrence for breast cancer patients. We're very pleased with our progress to date and are working toward our goal of a commercial launch next year."
If the financial details are ironed out, Axela will move to Xceed's former facility at 50 Ronson Dr. in Toronto. Rocky Ganske, former president and CEO, has been named CEO, with overall responsibility for the company's financial and manufacturing operations. As president, Deems will oversee sales, marketing, and business development. The two will work together on defining and implementing the company's overall strategy.
Ganske notes that in February, Axela was the recipient of this year's coveted The Biotechnology Initiative (TBI) Emerging Company of the Year award, which recognizes important contributions by individuals and companies to the development of life sciences in Ontario.
Axela claims that the Ziplex System, which won an R&D 100 award in 2008, is the first integrated system for automated gene-expression analysis, and it "is rapidly becoming the platform-of-choice for leading institutions performing translational research." Axela's dotLab System provides the only real-time, user configurable multiplex assay in the market, the company states. The expanded company's combined suite of panelPlus tools and services aims to enable new approaches to biomarker validation, disease diagnosis and personalized medicine. Axela also has a strong IP position, with more than 150 patents and applications worldwide.
"Our acquisition of Xceed provides a tremendous opportunity to accelerate introduction of novel multiplex biomarkers for diagnostics," Ganske said at the time. "Our focus is to simplify multiplex assay development and validation with robust, easy-to-use tools for analysis of DNA, RNA, and protein biomarkers that are designed to move seamlessly from the clinical-research arena into the workflow of the clinical-diagnostics lab."