A Medical Device Daily
Merge Healthcare (Milwaukee, Wisconsin) reported signing a definitive agreement to acquire etrials Worldwide (Morrisville, North Carolina), a provider of clinical trials software and services. Merge said its offer was formally recognized as a superior proposal by etrials' board of directors pursuant to the terms of that company's previously announced definitive agreement with Bio-Imaging Technologies (Newtown, Pennsylvania) dated May 4 and amended on May 15 and May 19. The latter company has just been renamed BioClinica after the March acquisition of Phoenix Data Systems.
In connection with the termination of the Bio-Imaging merger agreement, etrials is obligated to pay to Bio-Imaging a termination fee of $500,000 and reimburse Bio-Imaging for reasonable out of pocket expenses up to $250,000 by today.
The Merge tender offer, which consists of a mix of $0.80 in cash and 0.3448 shares of Merge common stock for each share of etrials common stock, represents an aggregate value of $1.70 a share, calculated using the $2.610, 20-day volume-weighted average price of Merge common stock as of the close of market on May 26, last trading day before Merge made this offer to etrials.
The proposed acquisition by Merge is expected to be consummated through a tender offer for all of the outstanding shares of etrials stock. Stockholders representing roughly 33% of etrials' outstanding shares have already agreed to tender their shares. Pending customary closing conditions and the successful completion of the tender offer, it is expected that the transaction will close in 3Q09.
The merger agreement provides for Merge to acquire etrials in a two-step transaction. The first step will consist of a tender offer for all outstanding shares of etrials common stock. The tender offer will be followed by a merger in which any untendered outstanding shares of etrials common stock will be converted into the right to receive the same consideration per share offered in the tender offer.
Merge said the combined organization will provide clinical trial sponsors and contract research organizations "comprehensive and configurable solutions that include both critical imaging technologies and proven eClinical capabilities."
Justin Dearborn, CEO of Merge Healthcare, said, "Our Merge OEM team has been a supplier of imaging solutions to pharmaceutical companies, CROs, the National Institutes of Health and to veterinary hospitals for years. We believe that there could be significant synergy from incorporating our imaging and data hosting solutions with etrials' broad portfolio of integrated eClinical solutions. etrials' experience in conducting global clinical trials also complements Merge's international expansion initiatives."
M. Denis Connaghan, CEO of etrials, said, "etrials welcomes this opportunity to become part of Merge Healthcare. It continues with our strategy to take the industry in a new direction . . . by bringing our customers access to additional capabilities that we believe increases the value of the important clinical trial development they perform."
He said the proposed deal "also gives the etrials organization a broader base of financial, product and development resources, and international relationships to continue the improvements that have been made and enable an expansion of the business."
Merge noted that clinical trials "are vital to the approval of new medical device and pharmaceutical treatments, and etrials has developed applications designed to accelerate the process, improve data quality and reduce overall trial costs."
Over the past 20 years, etrials has participated in more than 900 clinical trials involving more than 400,000 patients in some 70 countries through its electronic data capture (EDC), interactive voice and Web response (IVR/IWR), and electronic patient reported outcomes (ePRO) technology for clinical trial development and data management.
In the same timeframe, Merge has built software solutions that it said "improve the speed, cost and quality of medical imaging workflow."
The company said, "As clinical trials are becoming more dependent on imaging information, this acquisition allows Merge to capitalize on emerging trends and accelerate both companies' strategy to consistently deliver increased value to customers in the clinical trial market."
etrials' Dearborn said, "This acquisition enables both companies to leverage the other's customer relationships, from pharmaceutical companies, CROs, medical device manufacturers and veterinary hospitals; creating cross-sell and up-sell opportunities." The compnies noted that etrials' offerings have no overlap with Merge's products.
Merge Healthcare is a provider of software solutions that automate healthcare data and diagnostic workflow to build a better electronic record of the patient experience.
In other dealmaking activity:
• Veran Medical Technologies (St. Louis) said it has secured a worldwide license to intellectual property from Medtronic (Minneapolis) related to electromagnetic navigation. The Navigation division of Medtronic has developed significant intellectual property in the field of electromagnetic navigation through its StealthStation AxiEM Navigation System for use in neuro, spine, and ENT surgery, Veran said. The licensing of the Medtronic electromagnetic navigation and registration patents will enable Veran to expand its IG4 line of product capabilities and market breadth in the minimally invasive interventional oncology field. Veran is currently marketing the IG4 - X-Thoracic Navigation System and intends to launch an IG4 - Endobronchial Navigation System, pending FDA approval.
Veran is a privately held image guided medical device company focused on developing the next standard of care for minimally invasive delivery of interventional oncology therapies. Veran provides 4-D registration capability for precise targeting of lesions via its FDA-cleared platform. The Veran platform aims to reduce procedure time, reduce radiation exposure for the clinical staff, and increase targeting accuracy enabling physicians to cost effectively treat patients with reduced co-morbidity risk.
• Ingenix (Eden Prairie, Minnesota), a health information, technology and consulting company, said it has acquired AIM Healthcare Services (Franklin, Tennessee) and its affiliated companies, Netwerkes and Ingram & Associates. AIM provides payment accuracy solutions for healthcare payer and hospital clients in the U.S. Terms of the all-cash transaction were not disclosed.
Through its universal connectivity platform, Intellijet, its broad network of payer and provider clients, and its on-site teams of healthcare experts, AIM will contribute to existing Ingenix solutions for preventing, detecting and correcting errors throughout the claims lifecycle. AIM's portfolio will also bolster Ingenix's coordination of benefits capabilities, particularly for federal and state government payer clients.
AIM and Ingenix share the goal of helping clients reduce costs by eliminating administrative complexity. The cost of claims inefficiencies to the U.S. health care system is over $150 billion a year, according to mid-range estimates in a recent review conducted by The Lewin Group.
• Micronics (Redmond, Washington), a developer of point-of-care molecular and immunohematology diagnostic products, said it has entered into a license agreement with PHRI Properties, a nonprofit corporation wholly owned by the University of Medicine & Dentistry in New Jersey, for the right to make, have made, use and sell Micronics' products that incorporate PHRI's molecular beacons technology.
Micronics says it is advancing a family of near-patient, point-of-care molecular tests for infectious disease diagnosis and forensic testing. These tests employ Micronics' microfluidics technologies, which enable substantial reductions in both the volume of a sample taken from a patient and the amount of reagents required to perform a nucleic acid amplification assay for the detection of the unique genes present in infectious disease pathogens.
Molecular beacons are highly specific probes that fluoresce in a characteristic color if a target gene is present in a patient's sample. These probes are incorporated into Micronics' microfluidics cartridges for ease of use and prolonged storage at room temperature.
The cartridges can perform either single or multiplex pathogen detection. Each cartridge is processed by a lightweight, low-cost, battery-powered instrument with enabled software connectivity. Micronics' tests are designed to provide a result in less than 30 minutes, directly from sample acquisition in a sealed disposable cartridge.