PARIS - French biotech ExonHit Therapeutics plans to use proceeds from a rights issue to buy a small diagnostics firm in the United States to expand use of its test for Alzheimer's disease, the company said on Monday.
The group has drawn up a shortlist of five possible targets and expects to complete the deal in the third quarter of next year, Chief Executive Loic Maurel told Reuters in an email.
We wish to become a leader in molecular diagnostics, he said.
ExonHit said the acquisition would help expand the use of its AclarusDx blood-based test for the detection of Alzheimer's disease in the U.S., which accounted for 55 percent of the global diagnostics market.
Founded in 1997 and listed in 2005, ExonHit focuses on alternative RNA splicing -- a natural process in the human body -- to develop blood-based diagnostic tests and treatments for cancer and neurodegenerative diseases.
RNA is ribonucleic acid, a type of molecule.
Through alternative RNA splicing a gene directs the production of proteins. However, the splicing can sometimes lead to abnormal proteins that trigger a disease or contribute to it.
ExonHit's technology helps identify these changes in splicing. The genes encoding the abnormal proteins can be used as therapeutic targets for new or existing drugs.
The company unveiled a capital increase of up to 20.6 million euros ($30.65 million) earlier on Monday to help finance the planned acquisition. It plans to sell 4.16 million new shares at 3.75 euros each but this could rise to 5.5 million.
The news sent its shares down as much as 15 percent to 4.05 euros. The group's market value was 133 million euros as of Friday.