Rosetta Genomics signs exclusive licensing deal with Avatao Biotech in China
Rosetta Genomics (NASDAQ:ROSG) announced Tuesday it has signed an exclusive licensing deal with Chinese developer and distributor of diagnostic products, Avatao Biotech.
Under the terms of the deal, Avatao will receive the exclusive rights to market and sell Rosetta's miRview mets and miRview mets2, a series of microRNA-based diagnostic tests, in the People's Republic of China. Avatao will also have the exclusive rights to market one additional product in China, which it must select within one year.
In consideration, Rosetta will receive upfront payments, payments upon achievement of certain regulatory and commercial milestones, and royalties based on net sales. The total potential payments to Rosetta exceed $8 million, not including royalties, it said.
Rosetta's miRview mets products are a series of microRNA-based diagnostic tests that accurately identify the primary tumour site in metastatic cancers or cancers of unknown primary origin (CUPs).
"Expanding into these Asian markets is a key element of our globalization strategy and offers tremendous growth opportunities," commented Rosetta president and CEO, Kenneth A. Berlin.
In other news, Rosetta also announced today details of its restructuring plan, which will see a 50% reduction in the company's monthly cash burn. Rosetta said it has already provided termination notices for 24 positions in Israel, where it is based, and will terminate an additional 11 positions as soon as it is possible under Israeli employment regulations.
The company said the restructuring will reduce annual operating expenses by about $4.2 million. The employment terminations are primarily in its research and development, and general and administrative departments. These measures will become effective as of November 2011, it said.
"With the recent launch of our U.S. oncology sales force, our emphasis has shifted from research and development to product commercialization. The elimination of these positions will allow us to concentrate our resources on growing sales of our miRview® mets2 and miRview® lung and other microRNA diagnostics in the U.S.," Berlin said.
On the Nasdaq exchange, Rosetta shares gained 6.86% to $1.09 as of 3:44 pm EDT.
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