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HealthLinx (ASX: HTX) has entered into a conditional binding heads of agreement for the sale of the majority of its intellectual property assets, including the company's ovarian cancer diagnostic OvPlex™, to Mane Cancer Diagnostics.

The deal will net HealthLinx a 30% stake in Mane and US$250,000 in cash, indicating a value of A$6.25 million for the assets, and will free up the company to focus on its IgY assets and developing best practice diagnostics that detect and monitor diseases.

California headquartered Mane is a privately held diagnostics company with a focus on developing and marketing diagnostic products for unmet oncology indications that affect men and women.

Professor Greg Rice, chairman of HealthLinx, commented on the milestone: "This IP Sale is an exciting opportunity for HealthLinx.

"It will enable the company's assets to be commercialised in the United States where the biggest opportunity for these assets exists, and which has been a long-standing objective of the company.

"We are delighted with the asset growth opportunity that the Mane transaction represents for our shareholders, by having direct access to funding in the U.S. financial markets and navigating through the FDA regulatory pathway.

"We believe this allows HealthLinx shareholders the best available opportunity of realising potential future value from the IP that they have helped to create.

"Key to this is that Mane will be adequately funded and well capitalised with over $5 million starting cash at bank to deliver on future milestones."

Following completion of the acquisition by Mane, the company will focus on completing necessary studies and approvals, including U.S. Food and Drug Administration approval, to enable the marketing and sale of OvPlex™ in the United States and other jurisdictions.

The deal is expected to be finalised in the December quarter following shareholder approval.

IgY assets

As part of the deal, prior to Healthlinx selling, licensing or assigning the IgY assets to a third party, the company must first offer the assets to Mane on no less favourable terms.

Diagnostics

Unlike the therapeutics' market, where it can take up to 15 years and US$1 billion to get a drug from discovery to the market, a diagnostic will usually take less than a third of that time and less than 10% of the cost.

In vitro diagnostics are extremely valuable in detecting illnesses at an early stage, both predisposition and onset.

These type of diagnostics involve the analysis of patient samples that are tested outside the body, such as blood, urine, saliva and hair.

Board structure

On completion of the asset sale, the Mane Board will comprise one director nominated by HealthLinx and four current Mane directors.

NASDAQ listing

Mane is scheduled to list on the NASDAQ in the December quarter of 2012, which is a condition of the sale, as well as the completion of a capital raising of no less than US$5.5 million.

Evan Levine, executive chairman of Mane Cancer Diagnostics, said: "A NASDAQ listing provides Mane with access to the largest healthcare capital market in the world and will enable us to execute our business model and derive maximum value from OvPlex™ in the fight against the detection of Ovarian Cancer - a disease that affects more than 25,000 women in the United States alone each year."

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