Clinical Data closes sale of genetic, pharmacogenomic testing and biomarker development business

Clinical Data, Inc. (NASDAQ: CLDA) today announced that the Company has closed the sale of its genetic and pharmacogenomic testing and biomarker development business to Transgenomic, Inc. (OTCBB: TBIO) for $15.5 million. The sale completes Clinical Data's transformation into a pharmaceutical company with a deep product pipeline, including two promising late-stage compounds, the most advanced of which is vilazodone, a new treatment in development for Major Depressive Disorder. A New Drug Application for vilazodone was accepted for review by the U.S. Food and Drug Administration (FDA) on May 21, 2010, with January 22, 2011 currently assigned for decision-making by the FDA under the Prescription Drug User Fee Act or PDUFA.

“Our commercial team is now fully focused on launch preparations for vilazodone, subject to successful completion of FDA review, and we continue to manage our cash and other resources as we move closer toward this key milestone.”

At the closing, Clinical Data was paid $6 million in cash and received a three-year promissory note for $8.6 million bearing interest at 10%, and a one-year promissory note for $988,000 (an increase of $56,000 from the amount previously disclosed due to certain integration costs to be incurred by both companies) bearing interest at 6.5%. Both promissory notes are secured by all of the assets of Transgenomic. Clinical Data will also receive a percentage of accounts receivables collected by Transgenomic after the closing, as well as milestones and royalty payments on the anticipated development and commercialization of multiple new pharmacogenomic diagnostic products.

"This divestiture completes our rapid, strategic transformation to a pharmaceutical company with late-stage therapeutic programs and a pipeline of highly selective compounds which have demonstrated their potential in treating a variety of diseases," said Drew Fromkin, President and CEO of Clinical Data. "Our commercial team is now fully focused on launch preparations for vilazodone, subject to successful completion of FDA review, and we continue to manage our cash and other resources as we move closer toward this key milestone."

Under the terms of the asset purchase agreement, Transgenomic acquired Clinical Data's FAMILION family of genetic tests for inherited heart diseases and biomarkers underlying the PGxPredict tests which predict drug response, as well as the operational infrastructure that supports the business. In addition to the cash and promissory notes to be received by Clinical Data at closing, the Company will also share in the collection of accounts receivables to be collected over the first eighteen months after closing, which is estimated to be as high as $1.6 million, receive milestones of up to $500,000 in cash or in Transgenomic's stock upon the commercial launch of two pharmacogenomic tests, and royalty payments on the development and commercialization of multiple new diagnostic products that leverage the biomarker patent estate and expertise sold by Clinical Data.

Clinical Data was advised in the transaction by Wedbush PacGrow Life Sciences, which also provided a fairness opinion to the Company's Board of Directors Clinical Data's Chairman, Randal J. Kirk, through certain of his affiliates, invested $6 million in the form of an equity investment in Transgenomic, in connection with the financing of the acquisition by Transgenomic.