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9342-8530 Quebec Inc DGCRF

Diagnocure Inc is a Canada based biotechnology company. It is primarily engaged in the business activity of development and commercialization of products relating to the diagnosis of cancer. The group generates its revenue from research and license agreement. The head office of the company is located in Quebec, Canada.


GREY:DGCRF - Post by User

Post by modulexon Jan 31, 2016 11:46am
215 Views
Post# 24510131

HOLOGIC INC.

HOLOGIC INC.January 31, 2016 Mr. James B. Comey Director Federal Board of Investigation FBI Headquarters 935 Pennsylvania Avenue, NW Washington, D.C. 20535-0001 Mr. Comey: This e-mail is asking the FBI to investigate a controversial transaction involving Hologic, Inc., headquartered at 250 Campus Drive, Marlborough, MA 01752. Hologic is attempting to acquire canadian-based DiagnoCure inc. headquartered at 4535 Wilfrid-Hamel blvd., suite 250, Quebec QC G1P 2J7, PCA3 asset, a prostate cancer biomarker for a cash consideration of $5.5 M. Hologic further wants to obtain a right of first refusal to license DiagnoCure's new multi-marker prostate cancer test ("PCP") in the field of high-volume in vitro diagnostics (IVD) testing. Hologic, through its subsidiary Gen-Probe, has disbursed since 2012 CAN $2,300,474 in quarterly royalties to DiagnoCure in regard of the PCA3 licensing agreement. Hologic will no longer pay royalties to DiagnoCure in the event the above transaction becomes approved, have the leisure to upgrade the PCA3 asset and even sell it at a profitable price. On April 27, 2015, Mr. Allan Harris, Hologic's newly appointed Vice President, Strategy and Business Development for the Diagnostic Solutions division, was introduced to DiagnoCure's mamagement. Numerous conversations took place aimed at boosting Hologic's interest in PCA3 and better understanding the intention of Hologic with respect to the PCA3 asset. DiagnoCure was told that Hologic was continuing to work on a commercial collaboration and were scheduling an internal review of the PCA3 asset. Their initial target date was to have internal alignment by the end of May 2015 in order to revert back to DiagnoCure with a proposal. Hologic's internal review was slightly delayed to June 2015 and, following it, they requested a meeting which took place in Montreal on July 1, 2015. Mr. Thomas West, President of Hologic's Diagnostic Solutions division attended that meeting together with Mr. Harris, in the presence of Dr. Yves Fradet, President and CEO of DiagnoCure and Mr. Richard Bordeleau, Senior Advisor to DiagnoCure. In preparation for that meeting, several alternatives were discussed, ranging from a royalty reduction plan to an acquisition of DiagnoCure or of some of its assets. Hologic conducted additional due diligence on PCA3 related IP as well as on assets other than PCA3 such as the PCP multi-marker test for prostate cancer and the colorectal staging test GCC during June 2015. The possibility for DiagnoCure to produce PCA3 kits for PCR Platform in Quebec City was also considered. During the July 1 meeting, all the above mentioned alternatives were discussed. While Hologic had a renewed interest to fully exploit PCA3, the level of royalty of 8%, which was due to increase to 16%, was negatively affecting the potential return of any commercial project Hologic could pursue. Soon after that meeting, Hologic notified DiagnoCure that an asset purchase was its preferred scenario. A draft letter of intent was received by DiagnoCure on August 14, 2015, by which Hologic wanted to pay CAN $5.5 M in cash for all of DiagnoCure assets (PCA3 and PCP) related to the field of prostate cancer, but without the repurchase by DiagnoCure of 4,900,000 series A convertible Preferred Shares held by Gen-Probe, at a value of CAN $1,034,740. A revised offer received by DiagnoCure on October 16, 2015 provided for Hologic to pay CAN $5,000,000 to acquire all of DiagnoCure's prostate cancer assetss, without PCP, for Hologic to be granted a right of first refusal to license DiagnoCure's new multi-marker prostate cancer test ("PCP") in the field of high-volume in vitro diagnostics (IVD) testing and PCP intellectual property. Hologic would agree to surrender for cancellation of the 4,900,000 Preferred Shares currently held by Gen-Probe. The committments to "lock-up agreements" from some of DiagnoCure's shareholders is also conditional to the execution of the transaction. DiagnoCure attempted of regaining all commercial PCA3 rights from Hologic and exploiting their potential. Following the design of an integration plan and after securing the necessary financial backup to complete such a transaction, offers to purchase Hologic's entire protate oncology business unit were made in 2014. Hologic declined the offers and, in 2015, showed a strong interest in further developing the market for PCA3. In August 2008, DiagnoCure's subsidiary DiagnoCure Oncology Laboratory, launched Previstage GCC as a laboraty-developed test. On June 28, 2011, DiagnoCure granted a worldwide exclusive license on Previstage GCC to Signal Genetics which acquired DiagnoCure's U.S. CLIA service laboratory. The license was later terminated and DiagnoCure regained all commercial rights and intellectual property on its GCC biomarker on January 11, 2013 in an out-of-court settlement with Signal Genetics. Why can't DiagnoCure regain from Hologic all its commercial PCA3 rights? The answer is simple. Hologic knows full well that PCA3 is a valuable asset and will therefore not leave it go from its portfolio, and that DiagnoCure is in financial straits, therefore it wants to crush its fate to the bone. DiagnoCure claims that it had financial resources available in 2014 to purchase Hologic entire prostate oncology business unit, which is definitely valued at more than Hologic's shameful $5.5 M current PCA3 offer and as 2014, is rushing, is in a bind to sell its PCA3 asset at a major discount. DiagnoCure further anticipates that the sale of all assets to Gen-Probe (ultimately Hologic) may be considered a change of business by the Toronto Stock Exchange (the "TSX") and as a result, will require DiagnoCure to meet the original listing requirements of the TSX. If the transaction is completed, DiagnoCure expects that it would no longer meet the original listing requirements of the TSX. DiagnoCure is surely on a liquidation path and will fold as a problematic company. On Decembetr 30, 2015, I have asked Hologic President and CEO, Mr. Stephen P. Macmillan to show good faith and increase Hologic's offer to at least CAN $11 M. I was replied on January 4, 2016 by Mr. Michael J. Watts, VP, Investor Relations and Corporate Communications of a flat refusal. Hologic is not offering any whatsoever "goodwill value" as part of the proposed transaction, which is clearly indecent. It basically offers DiagnoCure only twice the amount of royalties DiagnoCure has received since 2012, on top of requesting a right of first refusal of DiagnoCure's PCP asset. Hologic does not take into account the long-term perspective of PCA3 likely to generate much higher revenues that currently, which is unfair.
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