By Gabrielle Mostello
Renovaro announced on Monday that it will acquire fellow AI-powered diagnostics and drug discovery firm Precision Oncology in an all-stock transaction. Through the acquisition, Renovaro will gain access to Predictive’s biobank of 150,000 tumour samples and 200,000 pathology slides, enabling the company to accelerate drug discovery across multiple cancer types.
Renovaro CEO David Weinstein said that the acquisition of Predictive Oncology “will enhance our capabilities by assisting oncologists with patient specific diagnostic and therapeutic clinical support data.” He said that Predictive Oncology’s machine learning technologies may allow Renovaro to launch a decision support platform for oncologists this year. “As importantly, there are strong synergies with Predictive’s small molecule solid tumour drug-tumour response modeling capabilities and Renovaro’s liquid biopsy approach to early cancer detection and monitoring,” Weinstein added.
Vision for the future
Once the deal is complete, Renovaro will initially be focused on developing, validating and rolling out novel diagnostic tests in Europe, with the main goal of bringing an in vivo chemosensitivity and resistance assay for predicting chemotherapy response to European markets. The combined companies will collaborate across multi-omic platforms for drug discovery.
Its long-term vision includes developing a global point-of-care cancer solution; creating a comprehensive solution with the companies’ combined capabilities that encompasses diagnostics, early detection, personalised therapies, in silico modeling and biomarker discovery; and ultimately advancing cancer therapy by improving outcomes and reducing costs.
Predictive Oncology first announced in November that its board of directors had begun looking into options for maximising shareholder value. In its third quarter financial results, the company reported a loss from continuing operations of approximately US$2.3 million and US$345,686 in total revenue.
Predictive Oncology Chairman and CEO Raymond Vennare said in December that the company was in discussion with several interested parties; however, it was ultimately enticed by the possibility of combining its resources “with Renovaro’s multi-disciplinary AI, multi-omic and multi-modal data expertise.”
Terms of the deal
The two companies have signed a letter of intent agreeing for Predictive to become part of Renovaro in exchange for preferred stock of Renovaro that was created for the deal. The preferred stock will be issued to Predictive shareholders in a 1:1 exchange and is automatically redeemable for US$3 per share after 18 months.
The companies have agreed to finalise the merger by February 28. In order for the transaction to go through, Renovaro must raise a minimum of US$15 million and receive formal approval from Predictive Oncology shareholders. If Predictive shareholders fail to approve the acquisition, Renovaro will be entitled to an exclusive two-year royalty-free license to access Predictive’s biobank.
“Over the coming weeks, we will work diligently to finalise the composition of our leadership team and board of directors, as well as details concerning the combined company’s R&D priorities and operations,” concluded Weinstein and Vennare. “We are both fully committed to completing this transaction as soon as possible, and actualising a new, best-in-class oncology-focused technology that promises patients a brighter future.”
