On a strategic level, the deal could be seen as an attempt to gain a foothold in a $6.5 billion market. According to Jain PharmaBiotech, this represents approximately 3.3 per cent of the total diagnostics market and approximately 14 per cent of the in vitro diagnostic market.
The molecular diagnostics market is expected to increase to $12 billion by 2010 and $35 billion by 2015. A major portion of it can be attributed to advances in genomics and proteomics. Biochip and nanobiotechnology are expected to make a significant contribution to the growth of molecular diagnostics.
Under the terms of the agreement, Clinical Data will acquire two clinically relevant molecular diagnostic tests available commercially and additional developmental opportunities in the CNS and cardiovascular areas.
Israel Stein, president and chief executive officer of Clinical Data said: "The acquisition will allow us to leverage our market knowledge and experience with GNSC's platform."
"Genaissance Pharmaceuticals is a strong strategic fit, enabling us to enter the molecular diagnostics market in a meaningful way," he added.
Stein added that in purchasing Genaissance, the company hoped to enter the theranostics sector - guiding pharmaceutical therapy through the use of diagnostic tests. This, he said required the integration of regulatory, research, clinical and marketing approaches.
"We strongly believe the benefits of genetically targeted pharmacotherapy will undoubtedly become essential to disease prevention and treatment," he added.
Under the terms of the agreement, announced Tuesday the deal is an all-stock transaction valued at $56 million. Genaissance shareholders will own 40 per cent of the combined company when the deal closes sometime in the fourth quarter.
The acquisition will also see a change in personnel with current Genaissance board members Kevin Rakin and Joseph Klein joining the CLDA's board of directors. Burton Sobel, Amidon professor, physician-in-chief, and Professor of Biochemistry at the University of Vermont, will also join the Board, bringing the total number of directors to seven.
Genaissance focuses on integrating the use of single-nucleotide polymorphisms (SNPs) into the development of DNA-based diagnostic and therapeutic products. This merger illustrates the growing recognition of an emerging pharmacogenomics market.
Randal Kirk, chairman of Clinical Data said: "Pharmacogenomics is poised to play a significant role in healthcare and is a growing area of research that is gaining traction with pharmaceutical companies and clinicians."
"Through this acquisition, Clinical Data is building on its strong existing foundation to enter new markets and continue to be an innovator in improving patient healthcare," he added.