A Medical Device Daily
Synovis Life Technologies (St. Paul, Minnesota), through a subsidiary, said it has completed its purchase of substantially all the assets of Pegasus Biologics (Irvine, California), a private device company focused on the development of advanced biological solutions for soft tissue repair. The purchase price was $12.1 million in cash. Synovis said it would retain manufacturing operations in Irvine and operate the acquired assets as a separate division.
"In the short time since we signed the purchase agreement, our integration team has made excellent progress toward resuming operations," said Richard Kramp, president/CEO of Synovis. "We have identified, contacted, interviewed and successfully hired 25 employees most critical to resume production, regulatory and clinical affairs, quality and customer service. These talented people began work as Synovis employees this week. Further, we are in the process of interviewing former Pegasus marketing and sales professionals and distributors to start rebuilding a team dedicated to promoting the OrthADAPT and Unite products, and serving our new customers. In addition, we signed a three-year facilities lease and are reviewing internal and external candidates for long-term leadership of this division."
Kramp added that "Growth through acquisition has been an important long-term strategy to augment Synovis' organic growth. We bought this business at a very attractive price, given the established OrthADAPT and Unite products with U.S. and European regulatory clearances, complementary soft tissue repair technologies and expanding market opportunities for soft tissue in orthopedics and wound care."
According to Synovis, the acquired technologies use flexible cross linking and sterilization processes which stabilize and sterilize biological tissue for use in orthopedic, wound, oral/dental, spine and neurological, breast, abdominal and thoracic applications. These technologies have the potential to yield additional pioneering applications in the future, the company said.
The acquired assets include two commercialized products: The OrthADAPT Bioimplant, an equine pericardial-based scaffold developed with technologies for orthopedic surgical applications, including rotator cuff and Achilles tendon repair, where there is a clinical need to reinforce the repair; and the Unite Biomatrix, an equine pericardial-based wound dressing that provides a new treatment alternative for chronic wounds, such as diabetic foot ulcers and pressure ulcers.
In addition, Synovis acquired the OrthADAPT PR product, a combination product composed of equine pericardial collagen and woven PEEK fabric, which received FDA marketing clearance in May. According to the company, OrthADAPT PR is the world's first biologically based device specifically engineered for arthroscopic delivery for rotator cuff repair and represents a potentially revolutionary advance for this surgical procedure.
In other dealmaking activity, VeriChip (Delray Beach, Florida), a provider of radio frequency identification (RFID) systems for healthcare and patient-related needs, said it has received $4.4 million in escrow proceeds related to the July 2008 sale of its former Xmark subsidiary to The Stanley Works (New Britain, Connecticut) (Medical Device Daily, July 21, 2008).
As a result of the release of the escrow, the company will recognize its previously deferred gain of $4.4 million on its financial statements for the quarter ended June 30, 2009, which will be additive to its stockholders' equity.
"As expected, we have received the escrow funds related to the $48 million sale of our former Xmark subsidiary," said Scott Silverman, chairman of VeriChip. "As a result, we believe that the company once again satisfies the stockholders' equity requirement ($2.5 million) applicable to continued listing on the Nasdaq Capital Market. We expect to sustain compliance with that requirement for the foreseeable future."
VeriChip has developed the VeriMed Health Link System for rapidly and accurately identifying people who arrive in an emergency room and are unable to communicate. According to the company, this system uses the first human-implantable passive RFID microchip, cleared for medical use in October 2004 by the FDA.