OpGen and Curetis said they will merge into a transatlantic diagnostics developer focused on molecular diagnostics and bioinformatics, with a pipeline of diagnostics specializing in infectious diseases and antimicrobial resistance (AMR).
The combined company will market a commercial-stage diagnostics portfolio of CE-IVD-marked and FDA-cleared products and platforms, plus proprietary NGS-based and AI-powered technology designed to facilitate rapid molecular prediction of AMR.
OpGen and Curetis said the combined company’s two initial areas of focus will be rapid diagnostics for lower respiratory infection and urinary tract infection, as well as bioinformatics and NGS services for AMR prediction by Curetis subsidiary Ares Genetics as well as bioinformatics services based on the Acuitas Lighthouse® AMR knowledgebase by OpGen.
Key elements of the combined company’s strategy, according to Curetis and OpGen, include:
- Continuing to gain regulatory clearances and approvals and establish a market position for proprietary molecular diagnostic tests and platforms;
- Capitalizing on unique technology platforms by leveraging global commercial capabilities and existing partnerships,
- Pursuing new development collaborations;
- Improving return on capital and achieving future profitability by capitalizing on its financial leverage and achieving operational and research synergies. OpGen and Curetis did not spell out a dollar value in synergies the combined company would try to carry out.
They did say, however, that the combined company will be headquartered in Gaithersburg, MD, and publicly traded on NASDAQ following the merger. The new company’s European operations will be based in Holzgerlingen, Germany, while Ares Genetics, will continue its bioinformatics and NGS service lab operations in Vienna.
OpGen, which is now traded on NASDAQ, is under FDA 510(k) pre-market review for clearance of its Acuitas AMR Gene Panel test for the detection of antimicrobial resistance genes in bacterial isolates. The company is working to complete two additional FDA pre-market submissions—one for its lead rapid molecular diagnostic test, the Acuitas AMR Gene Panel Urine, and one for the Acuitas Lighthouse Software. Earlier this year, OpGen launched testing intended to support the Acuitas AMR Gene Panel Urine submission.
The transaction will be structured as an acquisition by OpGen of Curetis GmbH, a wholly-owned subsidiary of Curetis that owns all of the Curetis Group business.
‘A Robust Pipeline’
“We are convinced that the combination of OpGen and Curetis will help maximize value for our stockholders and will result in an organization with a robust pipeline of molecular diagnostic and bioinformatics products, significant management experience, and proprietary assets for developing and commercializing novel data-driven solutions in infectious disease diagnostics,” Evan Jones, OpGen’s current Chairman, President and CEO, said in a statement.
Jones will join the combined company’s Board of Directors in a non-executive role following the closing of the merger, which is expected early 2020, subject to approval by both companies’ respective shareholders and Curetis’ debt financing providers.
OpGen plans to acquire all shares of Curetis GmbH from parent Curetis N.V., thereby acquiring all of the subsidiary’s assets and liabilities, including the Curetis name. At the close of the transaction, Curetis N.V. will be entitled to receive 2,662,564 new shares of OpGen common stock, less the number of shares to be reserved for issuance to current holders of options, phantom stock and convertible debt securities issued by Curetis N.V.
As of September 3, the 2,662,564 new shares represented approximately 72.5% of OpGen’s outstanding equity, with current equity holders of OpGen (including option holders and warrant holders) retaining approximately 27.5% of OpGen equity, all on a fully diluted basis.
The transaction reflects an approximately $24 million valuation for the combined business, Curetis and OpGen said.
Upon completion of the deal, the combined company will have a Board of Directors to be chaired by William Rhodes, now Chairman of Curetis’ Supervisory Board, with four representatives to be named by Curetis and two by OpGen.
Curetis’ current CEO Oliver Schacht, Ph.D., will retain that position with the combined company, where OpGen CFO Timothy C. Dec will hold the same position. Additional representatives from the two companies will round out the senior management team, Curetis and OpGen said.
“This transaction will allow Curetis to access U.S. capital markets, which we believe is essential to accelerate the development of our proprietary molecular diagnostic platforms and solutions for microbiology,” Schacht stated. “It also strengthens our management team and financial position, allows us to leverage OpGen´s existing U.S. public company infrastructure, and adds complementary assets to our product development portfolio.”