The transaction allows Curetis to transform Unyvero into a uniquely broad platform offering with capabilities ranging from rapid 1 hour testing for 10+ diagnostic targets to highly multiplexed syndromic testing panels delivering results for over 100 diagnostic targets in 4 to 5 hours. Integrating Gyronimo into the Unyvero Platform for infectious disease testing will also allow Curetis to significantly expand its product portfolio into novel application in areas such as infection control, viral testing and CNS infections, as well as applications for immunocompromised patients.
Under the terms of the agreement, Curetis is acquiring all Gyronimo Platform assets, including fully functional prototype systems and the entire intellectual property portfolio comprised of several patent families pending and a key patent granted in the U.S., Canada and China already, and allowed in Europe. Curetis will also obtain exclusive Gyronimo know-how and a non-exclusive license to background intellectual property and know-how. Curetis will be granted exclusive worldwide rights to the platform, including the right to sublicense, partner or sell it, with an exemption for Carpegen and Systec in dental testing as well as in environmental and food safety testing.
Curetis will make a one-time upfront payment of EUR 5.0 million in cash. In addition, Carpegen and Systec are eligible for two discrete, one-time milestone payments upon platform and first cartridge CE marking and FDA clearance, respectively, totaling up to EUR 2.5 million. There will also be the potential for a royalty-based earn-out at an industry-typical mid-single digit percentage rate, up to a maximum of EUR 9 million.
Gyronimo offers rapid time to result (potentially as fast as 60 minutes), qualitative and, where needed, quantitative real-time PCR testing in a cartridge format that can provide up to 10 parallel multiplex qPCR reactions from one sample. As such, it lends itself to medium multiplexing applications ranging from 10 to 30 diagnostic targets. Curetis intends to fully and seamlessly integrate the Gyronimo Platform into its Unyvero Platform suite of products with respect to system architecture, design, software and handling. In particular, the new Unyvero Module will leverage the unique capabilities of the Unyvero Cockpit and Lysator for seamless workflow integration and flexible handling of very challenging and diverse native patient samples. In addition, all-in-one stand-alone modules are envisaged for certain future applications.
Curetis will take over functional prototype instruments and cartridges, and will complete the IVD development and industrialization as well as OEM manufacturing of systems and cartridge production. The Company expects completion of development and CE IVD marking not before late 2018. COGS of the Gyronimo cartridges are expected to be considerably lower than those for Unyvero Cartridges and other MDx multiplexing systems, opening up attractive commercial opportunities in the medium multiplexing infectious disease testing market segment.
"We are truly excited about the transaction which offers us an excellent opportunity to accelerate the growth and development of our Unyvero Platform with complementary and greatly expanding characteristics," said Dr. Oliver Schacht, CEO of Curetis. "Gyronimo's advanced product development stage, its speed, quantitation ability, low cost of goods and mid-range multiplexing features are unique. It is therefore a natural next step in the development of our Unyvero Platform and we do not intend to develop it as a separate system, but rather as an integral and modular part of our overall Unyvero Solution. It expands and provides our product portfolio with a remarkable competitive edge, i.e. an unmatched diagnostic bandwidth ideally suited for any particular clinical application from as few as 5 or 10, via 20 to 30, and up to over 100 markers. We believe that the platform will allow us to address additional infectious disease indications in hospitals. It will significantly expand our market opportunity and provide us with the opportunity to double our peak sales potential in the long run."
"With Curetis, we have found the ideal partner to take the Gyronimo Platform through the final stages of product development, industrialization, manufacturing and scale-up as well as global commercialization," said Dr. Antje Rötger, CEO of Carpegen GmbH. "We will benefit substantially from the ultimate commercial success of the platform and we have retained certain areas that are of direct commercial interest to us, such as dental testing and environmental and food safety testing. To this end, we have agreed that we may discuss a possible OEM partnership with Curetis at a future point in time to obtain Gyronimo instruments and cartridges for our own commercial purposes. We are excited to be working closely with Curetis on the smooth transfer of all assets and know-how in the coming months."
"We have developed the Gyronimo Platform from the first idea to its current stage as a fully functional and working prototype in a multi-year, close R&D collaboration and partnership with Carpegen," said Klaus-Gerd Schoeler, CTO of Systec GmbH. "Our teams are joint inventors of several core patents. We believe that putting the platform into the hands of a more mature, fully integrated IVD company such as Curetis offers us a faster and ultimately more successful and rewarding path to fully develop, leverage and commercialize the asset. We look forward to working closely with the Curetis team in the coming months as we hand over all system development projects."
At present, Curetis is marketing its Unyvero System and three application cartridges for pneumonia, implant and tissue infections, bacteremia and the company has a fourth Application Cartridge for intra-abdominal infections in late stages of development. Curetis' broad development pipeline of additional application cartridges further features applications to test for sepsis host response, urinary tract infections, cardiology-related infections and an extended panel for respiratory tract infections.