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Sep 9, 2011

Crescendo Bioscience Pockets $56M and Gives Buyout Option to Myriad

Crescendo Bioscience Pockets $56M and Gives Buyout Option to Myriad

Myriad made a $25 million debt investment, gaining the ability to acquire Crescendo.[© Sergey Ilin - Fotolia.com]

  • Myriad Genetics made a $25 million investment in Crescendo Bioscience, securing an exclusive, three-year option to acquire the company. Crescendo separately completed a $31 million Series C financing.

    If bought, Crescendo would expand Myriad's portfolio of molecular diagnostic products to include products for autoimmune disorders. Myriad would thus add a sixth disease specialty, rheumatology, to its current focus on oncology, preventative care, urology, dermatology, and neuroscience.

    The Series C investment round was led by aeris Capital and was joined by existing investors Mohr Davidow Ventures, Kleiner Perkins Caufield & Byers, and other investors. The $25 million investment by Myriad Genetics is nondilutive capital that is structured as long-term debt.

    Myriad may exercise its acquisition option at its discretion if Crescendo Bioscience attains a minimum revenue milestone during the three-year option term. In such a case the purchase price will be based on a predetermined multiple of revenue based on the growth rate of Crescendo at the time of option exercise.

    If Crescendo Bioscience does not attain the minimum revenue milestone during the three-year option term, Myriad will have a one-time right to exercise the option at the end of the option term and acquire Crescendo Bioscience for a fixed purchase price in lieu of the formula price. In either case the purchase will be made in all cash.

    To facilitate the potential option exercise, Myriad and Crescendo Bioscience have entered into a definitive merger agreement that has been approved by the requisite vote of Crescendo Bioscience's stockholders. In connection with the option, Myriad has loaned Crescendo Bioscience $25 million for a period of six years at an interest rate of 6%, with interest payable annually and principal payable upon maturity.

    Crescendo Bioscience has one product on the market. Vectra DA is a blood test that measures 12 serum biomarkers to determine the level of disease activity in patients with rheumatoid arthritis. Testing is performed at Crescendo Bioscience’s CLIA facility within 7–10 days of receipt of sample.


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