Clinical Data, a provider of various laboratory services, is acquiring Icoria in an all-stock deal worth as much as $12.5 million, the companies announced Tuesday.

Clinical Data (Nasdaq: CLDA) said it would pay Icoria shareholders 0.0139 shares of Clinical Data stock for Icoria shares. The deal will not be less than $10 million and not more than $12.5 million, the companies said.

Icoria (OTC BB: ICOR.OB) shares traded at 26 cents Tuesday afternoon, up 8 cents.

Clinical data shares traded at $21.61, down 51 cents, after the deal was announced.

The deal is expected to close later this year or early in 2006, pending Icoria shareholder approval. Icoria’s board has already endorsed the deal.

“We believe Clinical Data represents an excellent fit for Icoria and will provide an environment that values our people, commercial projects and technology platforms,” said Douglas Morton, chief executive officer of Icoria. “The board evaluated several ways to improve the company’s cash position and build shareholder value, and felt that this acquisition by a financially stronger company with a track record of successfully developing and marketing healthcare products and services is a positive outcome for our shareholders.”

Icoria has been in transition as a company over the past two years, having changed its management and switching its focus to become a healthcare company rather than focused on plant science.

Heinrich Gugger, the executive who led the transformation of Icoria, left the company in May. He was replaced by Morton, who had been hired as president in March to help with the healthcare transition.

Icoria, which was known formerly as Paradigm Genetics, sold much of its agricultural business to Monsanto for some $6.75 million in cash in March.

Clinical Data management said the Icoria acquisition complements its deal for another firm, Genaissance Pharmaceuticals. That deal, worth some $51 million, was announced in June. Genaissance is based in New Haven CT.

“Icoria’s biomarker discovery platform is an excellent fit with our molecular diagnostics business model while their metabolomics and genomics capabilities complement the pharmocogenomics capabilities we will be gaining in our pending acquisition of Genaissance Pharmaceuticals,” said Israel Stein, president and CEO of Clinical Data, in a statement. “This acquisition also strengthens our position in targeted diagnostics and theranostics. Like Genaissance, Icoria works with leading pharmaceutical and biotechnology companies as well as with government and academic institutions.”

Needham & Company, LLC acted as financial advisor to Icoria’s board.

Clinical Data is based in Newton MA.


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