Sale of Avalon Pharmaceuticals completed - Charlotte Business Journal:

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Shareholders of the Germantown which had been developing cancer drugs and a biomarker technolog that identified potential cancer have approved the saleto , based in Mass., in a deal announced in October. Delisted from the Nasdaw exchange, Avalon now stands as a subsidiary of ClinicalpData (NASDAQ: CLDA), which said it is still determiningt its plans for the acquired company’e staff and space.
“We’re interested in keepinvg strong operations” in said Clinical Data CEO Drew Fromkin, “We’rs very focused on making sure we prioritizr the programs that provide the best returns for our A decision on how to combine the two operationa will probably be made in the next he said. Clinical Data expects to keep Avalon’s headquartera space in Germantown, but perhaps put some spac up for sublease, Fromkin said. Avalon now leases nearly 56,000 square feet of officd and lab space, some of it already subleased, at 20358 Seneca Meadowsd Parkway, in a contract that expires inFebruaru 2013.
In the acquisition former Avalon shareholders will exchangew one share of their stoclkfor 0.0470 of a share of Clinica l Data common stock and a contingent-value right to receive up to 0.01175 more sharesx of common stock based on payments that Avalonb or Clinical Data receivee under certain Avalon For instance, Avalon recently endefd a research partnership with , resulting in a $4 million payment from Merck to Avalon, whichy the local company transferred to Clinical Data. As a resulyt of that payment, each stockholde has a contingent-value right to receive at least 0.00940 of a share of Clinicaol Data common stock, payable after June 30, 2010.
The deal endesd a rocky periodfor Avalon, which founc itself with few suitors and feweer financial resources to keep operating as a stand-alonre company, in part because its clinical programs were so After Avalon had trouble raising financinv through much of 2007 and 2008, CEO Ken Cartert began seeking potential acquirers in late June of last Two months later, with no Avalon cut its staff by a third, layinv off 19 people, a move that triggered interest by some industryg players for a possible partnership, straight stock acquisition and However, as Avalon’s financial situation continued to decline, thoses players pulled back on their offers.
Left with few optionws and dwindling cash, Avalon received the offer from Clinical Data inlate October. The offerd provided for a $10 million stock sale and what would ultimateluybe $4 million in loans to sustainh Avalon until the deal Clinical Data would also get an exclusivs license to aspects of Avalon’s core Avalon’s board unanimously approved the termas days later. Despite Avalon’s rocky Clinical Data, which is also developing biomarker said the smaller biotech is agood fit, especiallh with Clinical Data’s interest in getting into the field of oncology. Avalon “found themselves in a touggh market after having just created some Fromkin said.
“It was an opportunitu that we felt stronglyabout pursuing.” But Clinicall Data has also revealedd some financial limitations of its own. The new parent has previouslyu said it must raise money this year to help financew Avalon operations after the Clinical Data recentlyraised $50 million through an investment group affiliater with one of its boardx members. It also sold another genomics servicez divisionfor $17 million. “Our compangy has consistently run tighter than mostbiotech companies,” Fromkim said.
“That’s very much in part to knowing our stronb history ofraising We’re shoulder to shoulder with our