US company buys Rosetta Genomics for $10 million

Cancer diagnosis company Rosetta Genomics Ltd. announced over the weekend it has been sold for $10 million to US private company Genoptix. Genoptix, which is in the same sector, will pay Rosetta Genomics’s debt.

The share price for the deal will be $0.60, the price at which the shares opened trading on Friday when the announcement was made. The share price fell in Friday’s trading, driving the company’s market cap down to $2.8 million.

Rosetta Genomics was regarded as the great hope of Israeli biotechnology since 2000, when many elements of the genome, then referred to as junk DNA, were decoded. It became clear that these genes were in no way junk; they served as a control mechanism for other genes – “encoded genes.”

The encoded gene defines which protein will be created in the body. But an entire system of controller genes determines under which conditions and how many. This discovery was dramatic in human-genetics research, and Rosetta Genomics played a significant role in the decoding process, registering many patents for these erstwhile ostensibly “junk” genes.

The company raised $2m. when it was still a private company from Teva Pharmaceutical Industries Ltd. and Mori Arkin, among others. Its scientific committee included Nobel Prize winner Prof. Aaron Ciechanover and Copaxone inventor Prof. Michael Sela. Translating this revolution into products proved more difficult.

Rosetta Genomics conducted a modest IPO on Nasdaq in 2007, raising $26m. at a company valuation of $79m. It has raised $74m. to date on Nasdaq, but its shares have lost 90% of their value since the IPO. It only had $900,000 in revenue in its most recent quarter, which was one of its peak quarters.