A Medical Device Daily

Gen-Probe (San Diego) reported that it has signed a definitive agreement to acquire Prodesse (Waukesha, Wisconsin), a privately held developer of molecular tests for influenza and other infectious diseases, for about $60 million in cash. Gen-Probe's purchase price could increase to up to $85 million if Prodesse achieves certain financial and regulatory milestones in 2010 and 2011.

Gen-Probe said it expects to finance the transaction with cash currently on its balance sheet. The company said its initial expectation is that the acquisition will add about 5 cents to the company's 2010 earnings per share, based on about $15 million in total revenues.

"We believe acquiring Prodesse supports our strategic focus on commercializing differentiated molecular tests for infectious diseases," said Carl Hull, Gen-Probe's president/CEO. "The acquisition is expected to boost our near-term earnings and revenue growth by providing additional leading-edge assays for our experienced sales force to promote to our global customer base."

In connection with the acquisition, Gen-Probe and Prodesse have signed an agreement under which Gen-Probe's sales representatives in the U.S., Canada and Europe will begin co-promoting Prodesse's products in mid-October.

Both companies' boards have unanimously approved the transaction, and the Prodesse shareholder votes necessary to approve the transaction have already been obtained.

Prodesse develops molecular diagnostic reagents for a variety of infectious disease applications. It sells three FDA 510(k) cleared products in the U.S., and two additional CE-marked products in Europe. The company's products can be used in conjunction with various nucleic acid extraction and real-time PCR platforms, including Cepheid's SmartCycler II System.

Prodesse's ProFlu+ test was cleared by the FDA in January 2008 for the detection and discrimination of Influenza A Virus, Influenza B Virus and Respiratory Syncytial Virus. It is the only commercially available, FDA-cleared molecular test for these respiratory viruses that uses real-time PCR technology. It also sells FDA-approved, real-time PCR assays for the clinical diagnosis of Clostridium difficile, a bacteria that is the most serious cause of antibiotic-associated diarrhea, and human metapneumovirus, a common cause of lower respiratory infection in children.

Cooley Godward Kronish is serving as legal counsel to Gen-Probe on this transaction. XMS Capital Partners and Leerink Swann are serving as financial advisers to Prodesse, and Michael Best & Friedrich is serving as legal counsel.

In other dealmaking activity:

• Quidel (San Diego), a provider of rapid point-of-care diagnostic tests, reported that it has entered into a joint development and commercialization agreement with BioHelix (Beverly, Massachusetts). The agreement with BioHelix focuses on the development and commercialization of in vitro molecular diagnostic tests utilizing BioHelix's novel isothermal amplification technology.

The partnership combines BioHelix's expertise in the research and development of nucleic acid technologies for diagnostic applications with Quidel's strength in the development, manufacture and commercialization of diagnostic tests. Under the partnership, Quidel will fund and jointly develop with BioHelix assays for rapid detection of infectious pathogens in a non-instrumented, handheld format utilizing BioHelix's isothermal amplification technology. BioHelix undertakes primary responsibility for assay development while Quidel has primary responsibility for manufacturing, marketing and selling the new products developed under the agreement and exclusive, worldwide commercialization rights for the new products.

• Tissue and diaper maker Kimberly-Clark (Dallas) has acquired the pain management segment of Baylis Medical (Montreal), a manufacturer of high-tech medical devices for chronic pain management.

The amount of the transaction was not disclosed.

Since 2001, Kimberly has been the distributor of Baylis Medical's pain management products in the U.S.

Kimberly-Clark says the purchase enhances the company's position in the minimally invasive chronic spinal pain management segment.

"The acquisition of Baylis Medical's pain management business is consistent with our global business plan strategy to invest in the higher-growth, higher-margin medical device market," said Joanne Bauer, president, Kimberly-Clark Health Care. "This transaction will enable us to accelerate the growth of our pain management business around the world while strengthening our commitment to patients suffering from chronic spinal pain."