DEALS UPDATE: JANUARY 2009
A roundup of recent medtech strategic alliances, mergers & acquisitions and financings – Reprinted from Medtech Insight, Jan. 2009.
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Mergers & Acquisitions
AITECS Medical UAB & Moog Inc.
Precision instrument designer Moog (military, aircraft, satellite, machinery, and medical equipment industries) is continuing to build its medical device division through the acquisition of AITECS Medical UAB, a privately held Lithuanian infusion supply company. Moog paid €15mm ($21mm) cash, and will add AITECS to its device unit, which includes offerings from previously acquired infusion supply companies Zevex International and Curlin Medical.
China Medical Technologies Inc.
In vitro diagnostics company China Medical Technologies has decided to off-load its high-intensity focused ultrasound (HIFU) business to its major shareholder Chengxuan International Ltd. for $53.5mm in cash. China Medical sold the unit to focus its attention on its existing diagnostics business, which the company says is much more stable and generates higher revenue than the HIFU products.
Datascope Corp. & Sorin Group SPA
Sorin Group (cardiovascular devices) has announced it will acquire Datascope's (surgical devices) endoscopic vessel harvesting (EVH) business. The transaction is pending Getinge's $841mm acquisition of Datascope that was announced in September 2008.
Ethicon Inc. (a division of Johnson & Johnson) & Mentor Corp.
Johnson & Johnson has agreed to acquire Mentor (devices sold in the aesthetic and reconstructive surgery markets) for about $1.07bn in cash and will assume some debt. Each of Mentor's 34.6mm outstanding shares are valued at $31, a 105% premium. Mentor will function as a stand-alone business unit that reports through J&J's surgical products division Ethicon.
Ethicon Inc. (a division of Johnson & Johnson) & Omrix Biopharmaceuticals Inc.
Johnson & Johnson has agreed to acquire Israeli biomaterials and immunotherapeutics company Omrix for $25 per share (a 24% premium) in cash for each of its 17.5mm outstanding shares, for a total of $438mm or seven times its 2007 revenues of $61.7mm on earnings of $11.9mm. Omrix has $80.9mm in cash and equivalents and will function as a division of J&J's Ethicon; the acquisition will complement Ethicon's hemostats and surgical device products.
MediGuide Ltd. & St. Jude Medical Inc.
St. Jude Medical has acquired Israeli cardiovascular device company MediGuide for $283mm in cash plus the assumption of $17mm in liabilities. MediGuide's business centers on intra-body navigation systems for use in minimally invasive cardiovascular surgeries.
Minrad International Inc. & Piramal Healthcare Ltd.
Indian drug company Piramal Healthcare has agreed to buy publicly traded Minrad International (acute care pharmaceuticals and devices) for $40.1mm in cash and debt.
Radi Medical Systems & St. Jude Medical Inc.
St. Jude Medical has purchased Radi Medical for $250mm in cash, paying over three times what the private Swedish device maker is expected to make in 2008 sales. Founded twenty years ago, Radi, which will become part of St. Jude's cardiovascular division, brings expertise in three areas: interventional cardiology, radiology, and hemostasis management.
Alliances
Advanced Surgical Concepts & Olympus Corp.
Advanced Surgical Concepts (ASC; laparoscopic surgical devices) has granted Olympus (endoscopy systems) exclusive worldwide rights to distribute its single-port surgery instruments. ASC designed a line of laparo endoscopic single-site (LESS) devices to accommodate minimally invasive surgical procedures performed through the umbilicus.
Alzhyme Pty. Ltd. & Senexis Ltd.
Senexis (protein misfolding disorders) and Australian biotech Alzhyme have agreed to develop and jointly commercialize a blood serum diagnostic for early detection of Alzheimer's disease.
Ambrilia Biopharma Inc. & ZBx Corp.
Ambrilia Biopharma (infectious disease and cancer therapeutics and diagnostics) has granted ZBx (whole blood immunoassays) an exclusive option to license worldwide development and commercialization rights to a combination prostate cancer test.
Amgen Inc. & DxS Ltd.
DxS (molecular diagnostics) has signed an alliance under which it will provide its TheraScreen K-RAS mutation kit as a companion diagnostic to Amgen's colorectal cancer therapeutic Vectibix (panitumumab) in the US, where the drug is awaiting approval.
BioTrove Inc., Gene Express Inc. & University of Rochester Medical Center (a division of University of Rochester)
Working under a two-year grant sponsored by the National Institutes of Health, genetic profiling companies BioTrove and Gene Express will combine their technologies and together, along with the University of Rochester School of Medicine and Dentistry, exclusively develop a new diagnostic for indicators of lung cancer risk.
CeMines Inc. & Ortho-Clinical Diagnostics Inc. (a division of Johnson & Johnson)
Johnson & Johnson's Ortho-Clinical Diagnostics division has licensed exclusive rights to CeMines' (oncology therapeutics and diagnostics) IP that pertains to testing a blood sample for early-stage lung cancer.
Dako AS & Genentech Inc.
Dako (cancer diagnostics) and Genentech will team up to create a new cancer diagnostic that will be used as a companion product to an investigational drug candidate being developed by Genentech.
Devon Robotics (a division of Devon International Group), Health Robotics SRL & Itochu Corp.
Devon International (health care, manufacturing, and international trading) and diversified Japanese company Itochu have acquired exclusive rights to manufacture, market, and sublicense medication preparation robots designed by Health Robotics (intravenous preparation, compounding, and dispensing). Together, Devon and Itochu invested $60mm in Health Robotics in exchange for rights in the US, Canada, Mexico, and the Caribbean Islands to the CytoCare and i.v.Station automated robotic systems.
Fluidigm Corp. & Stanford University
Fluidigm (technologies for genotyping, gene expression, and sequencing) has licensed co-exclusive rights to Stanford University's IP that is used in combination with digital PCR and high-throughput sequencing to detect fetal genetic characteristics in maternal plasma.
Given Imaging Ltd. & Medtronic Inc.
Given Imaging (diagnostics for gastrointestinal disorders) has paid $20mm to acquire Medtronic's Bravo pH monitoring business. Bravo is currently the only wireless, catheter-free pH test for gastroesophageal reflux disease and is complementary to Given Imaging's PillCam and Agile GI capsules.
Inverness Medical Innovations Inc. & PrognostiX Inc.
PrognostiX (develops and markets next-generation cardiovascular diagnostics) has granted Inverness Medical Innovations (point-of-care tests) co-exclusive worldwide distribution rights (excluding Italy and Russia) to its CardioMPO diagnostic.
K2M Inc. & Promethean Surgical Devices Inc.
Promethean Surgical Devices (PSD) licensed fellow spinal device company K2M exclusive worldwide rights to its injectable polymer technology for use in spinal applications.
Kyphon Inc. (a division of Medtronic Inc.) & Pabban Development Inc.
To expand its portfolio of spine products, Medtronic has acquired assets and intellectual property related to Pabban Development's bone cement delivery system. Medtronic's Kyphon division will incorporate the technology into its balloon kyphoplasty procedure to treat vertebral compression fractures.
NeuroNexus Technologies Inc. & Philips Research Laboratories (a division of Royal Philips Electronics NV)
NeuroNexus Technologies (microelectronic and fluidic components for neurostimulation devices) and Royal Philips Electronics NV's Philips Research Laboratories have agreed to develop deep brain stimulation (DBS) devices for neurological diseases, initially targeting Parkinson's.
Power3 Medical Products Inc. & Transgenomic Inc.
Transgenomic (genetic variation and mutation analysis) has signed a letter of intent to exclusively license rights to CNS and cancer test maker Power3 Medical's neurodegenerative disease biomarkers. Transgenomic also has an option to acquire the portfolio.
Sorin Group SPA & Sphere Medical Ltd.
Sorin Group (cardiovascular and kidney disease treatments) will incorporate Sphere Medical's (monitoring products for the critical care market) microsensor technology into a new brand of in-line blood monitors designed to improve the outcome of cardiopulmonary bypass surgery patients.
Welch Allyn Inc. & Zoll Medical Corp.
Zoll Medical (resuscitation products) has agreed to distribute some of Welch Allyn's (diagnostic and monitoring equipment) devices. Although Welch Allyn is planning to discontinue its PIC and AED 20 lines of manual/conventional defibrillators in the near future, it will continue to sell its AED 10 defibrillator, and Zoll will become the manufacturer and exclusive supplier for the device. In addition, Zoll will exclusively distribute in North America Welch Allyn's Propaq LT monitor, which shows several ECG, SPO2, noninvasive blood pressure, and respiration parameters.
Financings
Adhezion Biomedical LLC
Adhezion Biomedical (formerly Spartan Medical Products; medical adhesives and antimicrobial sealants) has closed its two-tranche $5.25mm Series A financing round to Originate Ventures and Liberty Venture Partners.
Apeliotus Vision Science Inc.
Start-up diagnostic company Apeliotus Vision Science has received $500k from Life Sciences Greenhouse of Central Pennsylvania in the first tranche of its planned $2mm seed financing. AVS hopes to commercialize a noninvasive test that will diagnose AMD earlier than any other clinical test on the market.
ATS Medical Inc.
ATS Medical (heart valves and cryoablation systems) grossed $20mm by selling Essex Woodlands Health Ventures 8.5mm shares at $2.35 each (a 7% discount). ATS will use the money to pay $7.5mm in damages related to the settlement of its two-year-old lawsuit with CarboMedics, which claimed that ATS breached their mechanical heart valve contract.
Beijing Chemclin Biotech Co. Ltd.
Beijing Chemclin Biotech (products to test for infectious diseases or tumors) has raised $16.5mm through the closing of its Series B venture round. New investor China Healthcare Partnership (managed by MC China) led the financing and was joined by current backers SB China Venture Capital, Siemens Venture Capital, and WI Harper. China eCapital was the placement agent.
BioStable Science & Engineering Inc.
BioStable Science & Engineering (cardiovascular implants) has raised $5.5mm through the closing of its Series A venture round to Santé Ventures. One of the investor's managing directors will take a seat on BioStable's board.
Broncus Technologies Inc.
A few months after withdrawing its IPO, emphysema device developer Broncus Technologies is looking to venture capital again, raising $38mm in its Series G round led by first-time backer Ares Life Sciences, which put in $25mm and contributes a new board member. Broncus will use the money to complete the pivotal clinical trial for its minimally invasive Airway Bypass procedure, which helps release trapped air in the lungs.
Diagnoplex
Diagnoplex (molecular diagnostics) raised CHF10mm ($8.3mm) in its Series A round. NeoMed and seed backer Novartis Venture Fund co-led, and were joined by Initiative Capital Romandie. Diagnoplex was formed in 2005, and previously raised CHF700k. It will put funds from the current round towards pivotal trials of its Colox noninvasive colon cancer blood test.
Endoscopic Technologies Inc.
Endoscopic Technologies (cardiovascular device maker also known as Estech) has raised $11mm through the first closing of its Series B-1 venture round to returning backers Boston Scientific (which holds the option under a 2004 agreement to acquire the company) and Telegraph Hill Partners and new investor Saints Capital. The company is hoping to bring in up to $25mm.
EnteroMedics Inc.
EnteroMedics (medical devices for gastrointestinal disorders) has closed a $20mm debt financing with Silicon Valley Bank, Western Technology Investment, and Horizon Technology Management. EnteroMedics will pay 12% interest through the end of June 2009 and 11% through the remainder of the thirty-month loan.
Evogen Inc.
Evogen Inc. (high definition PCR molecular diagnostics) raised $3mm in a Series B financing round led by L Capital Partners, which was joined by returning shareholder Midwest Research Institute and individual angel investors.
Heart Test Laboratories Inc.
Heart Test Laboratories (coronary artery disease (CAD) diagnostic) has raised $5mm through the closing of its latest round to MD Venture Partners. The company has developed MyoVista, a noninvasive portable test that can be used to determine a patient's risk for myocardial ischemia (restricted blood flow to the heart), which contributes to 67% of all CAD cases.
Helicos BioSciences Corp.
Helicos BioSciences (genetic analysis for molecular diagnostics and drug discovery) netted $17.9mm through the private placement of 42.75mm common shares at $0.44 apiece (a 16% premium). Investors--which included institutional buyers in addition to returning backers Flagship Ventures, Atlas Venture, Highland Capital Partners, and Versant Ventures--also received five-year warrants to purchase an additional 25.65mm shares at $0.45 each. Leerink Swann was the placement agent.
MicroPhage Inc.
MicroPhage (diagnostics for hospital-acquired infections) completed an $11mm financing round to new and returning private investors. The company will use the money to finish developing its first diagnostics, which are aimed at methicillin-resistant Staphylococcus aureus.
Molecular Biometrics LLC
Molecular Biometrics (developing noninvasive infertility and cardiovascular and neurodegenerative disease tests) has raised $12mm through the closing of its Series A venture round. Safeguard Scientifics and Oxford Bioscience Partners co-led the financing and will contribute board members. The funds will be used to finish an international clinical trial and launch the company's noninvasive ViaMetrics-E system in Europe, Australia, and Japan next year and in the US in 2010.
Pioneer Surgical Technology
Pioneer Surgical Technology (spinal and orthopedic implants) has raised $15mm via its Series B financing round to first-time backer InvestMichigan! Growth Capital Fund with additional participation from returning shareholders Pharos Capital Group, Highlander Partners, Hopewell Ventures, and River Cities Capital Funds. Pioneer Surgical will put the money towards an IDE pivotal study of its NuBac lumbar nucleus replacement device, which incorporates the company's P3 technology.
ProstimRx Corp.
ProstimRx (medical device to treat prostate disorders) has raised $5mm through the closing of its latest round to MD Venture Partners. The company, which was formed in 2005, has created a device for prostatitis, benign prostate hypertrophy, erectile dysfunction, and other prostate conditions such as urinary tract symptoms, infertility, and sexual dysfunction.
Rcadia Medical Imaging Ltd.
Rcadia Medical Imaging Ltd. (computer-aided diagnostic software) has raised $3.3mm through the closing of its latest round. BioVentures Investors led the financing and was joined by current backer 20/20 HealthCare Partners. Rcadia will use the proceeds for a full commercial launch of its COR Analyzer and to establish a US office for North American sales and marketing.
Semprus BioSciences Corp.
Semprus BioSciences (formerly SteriCoat; surface technology for medical devices) raised $8mm in its Series A financing, which was co-led by returning shareholder 5AM Ventures and first-time backer Pangaea Ventures. The company's platform is designed to reduce medical device complications that result from infections, thrombus, restenosis, and bone integration.
Urodynamix Technologies Ltd.
Urodynamix Technologies (using near-infrared spectroscopy to diagnose and treat urinary conditions, erectile dysfunction, prostate cancer, and benign prostatic hyperplasia) has raised $2.5mm through the closing of the first tranche of a private placement. BC Advantage Funds bought 25mm shares at $0.10 apiece (a 9% discount). The company plans to offer another 10mm shares and close the financing next month.
Valor Medical Inc.
Valor Medical (endovascular surgery) grossed $1.4mm through the sale of convertible debt. The company will use the money to finish clinical trials required for CE Mark approval of its Neucrylate A cerebral berry aneurysm treatment device in Europe.
- Beth Detuzzi
Medtech Insight delivers the quality content you need on medical technologies impacting the spectrum of surgical, orthopedic, cardiovascular, and other markets. Written and edited by seasoned industry participants and experts, the Medtech Insight newsletter provides insights into the technology and market developments (devices, instrumentation, biomaterials, gene therapy, tissue engineering, etc.) impacting a wide range of surgical and non-surgical clinical practices (cardiothoracic & vascular surgery, general surgery, orthopedics & spine surgery, interventional radiology/cardiology, etc.). Learn more at www.medtechinsight.com. Includes FREE subscription to Health News Daily.
