The deal values the division – which provides prenatal testing, molecular diagnostics, paternity and forensic testing services - at C$7.5m (€5.5m) and will see Warnex lease lab and office space to Dynacare.
Michael Singer, chair of Warnex’ executive committee, told Outsourcing-pharma.com that: “The decision to sell the medical division, as opposed to other divisions, was based on a number of strategic considerations and consequently, became instrumental for the company at this time to significantly reduce its long-term debt.
“Our strategic review remains ongoing with a goal to further enhance shareholder value going forward. The Medical sale has not resulted in any job losses for the Company as all 25 employees related to this division have been hired directly by Gamma-Dynacare.”
According to Warnex’ third quarter filing revenue generated by its medical diagnostics and forensic testing services units increased 36 per cent and 20 per cent in the three months to September 30.
This contrasts with the performance of Warnex’ prenatal and pharmacogenetic testing business, which saw revenue fall 2 and 33 per cent, respectively, in the three month period.
News of the sale follows just days after the resignation of Warnex’ long-serving CEO, Mark Busgang and is accompanied by the firm’s agreement of a repayment plan with its debentureholders.
Gamma Dynacare employs more than 2,000 people at labs in Ontario, Montreal and Winnipeg and provides central laboratory services for clinical trials for pharmaceutical companies, contract research organizations, researchers, universities, hospitals and physicians.
In a press statement Gamma-Dynacare CEO Naseem Somani said: “Warnex Medical Laboratories brings to Gamma-Dynacare expanded capabilities in molecular medicine, oncology and companion diagnostics that will enhance our growth in the field of personalized medicine.
“In addition, the assay development expertise of Warnex Medical Laboratories will accelerate our ability to bring new, value-added laboratory tests to the Canadian marketplace."