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NeoGenomics and Power3 Medical Products to Form Joint Venture Contract Research Organization
Wednesday, April 04, 2007
Parties Aim to Commercialize Proprietary Blood Serum-Based Tests for the Early Detection of Breast Cancer and Other Diseases
Ft. Myers, FL -- NeoGenomics, Inc. (OTC Bulletin Board: NGNM) announced today that it has concluded an agreement with Power3 Medical Products, Inc. (OTC PK: PWRM) to form a joint venture Contract Research Organization (CRO). Power3 is an early stage company engaged in the discovery, development, and commercialization of protein biomarkers. Under the terms of the agreement, NeoGenomics and Power3 will jointly own a CRO and begin commercializing Power3's intellectual property portfolio by developing blood serum-based diagnostic tests and other services around one or more of the 523 protein biomarkers that Power3 has identified to date. Power3 has agreed to license to the CRO all of its intellectual property on a non-exclusive basis for selected commercial applications as well as provide certain management personnel. NeoGenomics will provide access to cancer samples, management, sales & marketing personnel, laboratory facilities and working capital. NeoGenomics will own a minimum of 60% of the new CRO venture which is anticipated to be launched in the fourth quarter of FY '07.
As part of the agreement, NeoGenomics will provide $200,000 of working capital to Power3 within fifteen days by purchasing a convertible debenture. NeoGenomics was also granted two options to increase its stake in Power3 to up to 60% of the fully diluted shares over the next 18-20 months. Mr. Robert Gasparini, NeoGenomics' President and Chief Scientific Officer, summarized this venture by saying, "Today, many chronic diseases are not diagnosable until a patient has had the disease for a significant period of time. We believe that proteomics, along with our focus on genomics, are the two emerging fields that will give us the technology, tools and answers needed to bridge this gap to earlier detection. Power3 is an emerging force in the proteomics community, developing and validating a process for reproducing protein biomarkers, and we are delighted to partner with them in this venture. In addition, their initial focus on breast cancer ties in nicely with our own strategic interests."
Mr. Gasparini went on to say, "Power3 has recently reported a series of compelling and statistically significant results in externally sponsored, blinded studies of normal and abnormal disease samples. These results and the reproducibility of Power3's process to find biomarkers is what caught our attention. We believe their ability to identify and correlate specific protein biomarkers with specific disease states will give the CRO a significant advantage in developing proprietary tests for such diseases. Biomarkers are signatures for disease, and once a biomarker or series of biomarkers has been correlated to a specific disease state, it enables the development of a clinical diagnostic assay or test. More importantly, if done correctly, these new tests will have the ability to detect disease from a blood serum sample well before current testing methodologies. This is in marked contrast to how we do business today by testing a specimen once the disease state is suspected or the patient is symptomatic. Blood serum-based tests have the potential to lead to a much earlier diagnosis, which is critical to the early and effective treatment of cancer and other diseases."
Mr. Gasparini concluded by saying, "We are optimistic that the Contract Research Organization will allow us to become much more vertically integrated as a high complexity laboratory capable of developing our own intellectual property and proprietary products. Indeed, this strategic alliance with Power3 is the perfect complement to our own plans for a CRO. We are already seeing demand and generating revenue in our California location for subcontract work to other research organizations, and we believe this alliance with Power3 will allow us to further offer a number of unique services. By adding the ability to perform specialized testing around Power3's biomarkers, we believe we can generate high margin revenue for the CRO and lay the foundation for a relationship with Big Pharma to develop companion diagnostic tests for some of the many promising drugs in the FDA pipeline. While we expect to take the next six months to further define the business model of this joint venture in more detail, our ultimate goal is to build a profitable CRO as quickly as possible. At this point in time, we do not expect this initiative to negatively impact our previously issued guidance for FY 2007 in anyway."
Steven Rash, Power3's Chairman and CEO, had the following to say about their relationship with NeoGenomics, "NeoGenomics is a first class diagnostic testing laboratory and we believe they are the perfect partner to help us commercialize and validate our proteomic-diagnostic technology. This relationship demonstrates the strength of Power 3's broad intellectual property portfolio and the power of our business model to partner with bio- medical companies to commercialize our technology in markets with critical unmet needs. In addition to the 523 biomarkers we have discovered and validated, our IP portfolio includes 15 pending patents and provisional patent applications, plus research and license agreements, in the areas of cancer, drug resistance, neurodegenerative disease, and metabolic syndromes. Now that we have a partner that can develop companion diagnostic tests for drugs under development, we believe that our IP portfolio will be even more compelling to the pharmaceutical industry."
A copy of the final agreement between NeoGenomics and Power3 was filed with the SEC on Monday as Exhibit 14.1 to NeoGenomics Annual Report on Form 10-KSB. Interested investors can obtain a copy through the SEC's EDGAR database, which is available at http://www.sec.gov.
About NeoGenomics, Inc.
NeoGenomics, Inc. is a high-complexity CLIA-certified clinical laboratory that specializes in cancer genetics diagnostic testing, the fastest growing segment of the laboratory industry. The company's testing services include cytogenetics, fluorescence in-situ hybridization (FISH), flow cytometry, morphology studies, anatomic pathology and molecular genetic testing. Headquartered in Fort Myers, FL, NeoGenomics has labs in Nashville, TN, Irvine, CA and Fort Myers and services the needs of pathologists, oncologists, urologists, hospitals and other reference laboratories throughout the United States. For additional information about NeoGenomics, visit http://www.neogenomics.org.
About Power 3 Medical Products, Inc.
Power3 Medical Products, Inc. (OTC: PWRM) (http://www.Power3Medical.com), is a leading proteomics company engaged in the commercialization of protein biomarkers, pathways, and mechanisms of diseases, through the development of diagnostic tests and drug targets for cancer and neurodegenerative diseases. Power3's patent-pending technologies are being used to develop screening and diagnostic tests for the early detection and treatment of disease, and its identified protein biomarkers, drug targets, and diagnostic tests are targeted toward markets with critical unmet needs in areas such as breast cancer and neurodegenerative disease. Power3 operates a state-of-the-art proteomics laboratory in The Woodlands (Houston), Texas.
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