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Tuesday, 10/28/2008 6:27:42 PM

Tuesday, October 28, 2008 6:27:42 PM

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Biotech Clinical Data Inc. will buy a Maryland competitor for $10 million in stock, the companies announced on Tuesday.

Newton, Mass.-based Clinical Data (Nasdaq: CLDA) said the acquisition of Avalon Pharmaceuticals (Nasdaq: AVRX) in Germantown, Md., will help expand its cancer business with technology to help identify both new diagnostics and treatments.

The price is based on the 15-day volume weighted average price of $12.49 for Clinical Data’s common stock through Oct. 27.
Clinical Data buys rival for $10M in stock

The agreement also entailed Clinical Data completing a private placement of nearly 3.4 million shares of Avalon’s common stock. Clinical Data also loaned Avalon $3 million, and paid Avalon $1 million in exchange for a global, exclusive license to that company’s technology for drug and biomarker discovery. A biomarker can indicate the activity or likelihood of a certain disease such as cancer.

Late in September, Clinical Data negotiated a $25 million private placement to handle day-to-day working capital.

The company is developing new biotechnology treatments and also tests to help predict drug safety and effectiveness.

Clinical Data’s headquarters will remain in Newton. The company employs about 300 people around the world.