A Diagnostics & Imaging Week
Bio-Imaging Technologies (Newton, Pennsylvania) and etrials Worldwide (Morrisville, North Carolina) jointly reported Bio-Imaging's intent to acquire etrials in a cash and stock deal valued at $10 million.
The proposed acquisition is expected to be consummated through a tender offer for all of the outstanding shares of etrials stock.
For each share of etrials stock, shareholders will receive 0.124 shares of newly issued Bio-Imaging common stock, 0.076 shares of newly issued Bio-Imaging preferred stock, and $0.15 in cash, which equates to a value of $0.9068 per share for etrials, representing a 27% premium to the average closing price for the past 30 days.
Stockholders owning approximately 33% of etrials outstanding shares have already agreed to tender their shares, and if needed, vote in favor of the approval of the merger agreement. Subject to customary closing conditions, and assuming a majority of etrials shares will be tendered pursuant to the tender offer, the tender offer is expected to expire on or about June 15, 2009.
As a result of the proposed transaction, etrials will not hold its previously announced first quarter earnings call on May 12.
etrials provides adaptive, web-based tools that work together to coordinate data capture, logistics, patient interaction and trial management.
Mark Weinstein, president/CEO of BioClinica said, "etrials is an excellent fit with our long-term corporate strategy. This addition instantly broadens our eClinical product offering while leveraging our global operations and brand reputation for quality client service. Together with our services-based approach, the combination enhances our existing relationships with customers from both companies and creates a new, stronger and stable partner for new pharma, biotech and medical device sponsors."
Weinstein continued, "The acquisition is anticipated to have a neutral effect on earnings per share from continuing operations in 2009 (excluding one-time charges related to the transaction), and be accretive to earnings per share in 2010. As a result of the transaction, we anticipate our combined 2009 service revenues, including the operating results of etrials from date of acquisition through Dec 31, 2009, to be in the range of $65 to $70 million, as compared to Bio-Imaging's previous guidance of $60 to $63 million, and reiterate Bio-Imaging's full year 2009 EPS, excluding one time charges related to the acquisition, of $0.23 to $0.25 per share."
M. Denis Connaghan, president/CEO of etrials said, "It has been our goal to move aggressively to deliver the best value to our customers and seize new opportunities for drug and medical device development. With the rapid growth of the eClinical market, we believe that becoming part of the BioClinica organization will enable us to deliver enhanced customer service, more rapidly capitalize on emerging trends in the marketplace and create greater value for our shareholders. By joining forces with BioClinica we believe we will help improve the accuracy, speed and safety of large-scale clinical trials with complex data requirements."
The merger agreement provides for Bio-Imaging 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 as described above. In the second step, 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.
In other dealmaking activity:
• The Ohio State University (OSU; Columbus), Cardinal Health (Dublin, Ohio) and the Ohio Third Frontier (Columbus) reported a collaboration to invest more than $10 million in the medical diagnostic industry, combining the research capabilities of OSU's Wright Center of Innovation in Biomedical Imaging (WCIBI) and Cardinal's expertise in the manufacturing and commercialization of molecular imaging products.
The partnership will expand the WCIBI to include a new Molecular Imaging Technology Center which will house OSU researchers and Cardinal's radiopharmaceutical manufacturing facility and nuclear pharmacy operations. Also, a faculty position in radiopharmaceutical chemistry will be added to OSU's department of radiology.
The WCIBI will provide OSU researchers with manufacturing capabilities and expertise for developing new molecular imaging agents for Positron Emission Tomography (PET). Cardinal will support manufacturing and dispensing of the agents for clinical trials across its network of radiopharmaceutical facilities.
John Rademacher, president of Cardinal's Nuclear Pharmacy business, said, "Researchers and industry alike will be attracted to the Molecular Imaging Technology Center as a one-stop shop for research, development, clinical investigational trials and full commercialization of new molecular imaging agents."
• Gen-Probe (San Diego) and DiagnoCure (Quebec City) reported signing an amendment to their 2003 agreement, establishing new FDA submission milestones and distribution arrangements to leverage the potential of the PCA3-based test for prostate cancer in the U.S., Europe and other countries.
Gen-Probe will acquire 4.9 million shares of newly issued DiagnoCure convertible preferred stock for $5 million (C$6.1 million).
Gen-Probe will receive a liquidation preference in certain cases and a security interest in some intellectual property. This subscription will take place on or around May 7.
The new milestones for an FDA submission of a PCA3 test can be fulfilled by Gen-Probe with its current end-point TMA assay or its investigational, real-time TMA assay, and Gen-Probe will make annual payments of $500,000 to DiagnoCure until specific milestones are met. Half the amounts paid will be applied against future royalties payable to DiagnoCure.
Also, DiagnoCure and Gen-Probe have agreed to develop distributor relationships in countries such as in Japan, Asia, Israel, South Africa and others.
In a separate release, Gen-Probe said that it intends to initiate in the 3Q09 a pivotal clinical study of its investigational PCA3 assay that could lead to regulatory approval by the (FDA).
• Bio-Matrix Scientific Group (San Diego) and Entest BioMedical, BMSN's wholly-owned subsidiary, reported a contract with Dr. Brian Koos, a professor of obstetrics and gynecology at the David Geffen School of Medicine at the University of California, Los Angleles for the development and validation of a screening test for gestational diabetes, a glucose intolerance in pregnant women.
Koos is the developer of the test which is licensed to Entest by UCLA. The test is intended to mitigate the lengthy process of diagnosing gestational diabetes. Entest is the exclusive licensee for Koos' gestational diabetes screening test. The companies said their goal is to develop a large scale sampling for validation of the screening test with FDA and then be marketed to hospitals and medical clinics.
• Royal Philips Electronics (Amsterdam, the Netherlands) has acquired Traxtal (Toronto), a medical technology company in the field of minimally-invasive instruments and software for image-guided intervention and therapy. Traxtal's navigation solution functions as a GPS for medical instruments, designed to make interventional radiology procedures more accurate while aiming to reduce contrast, radiation dose and interventional time. The navigation solution displays, during the procedure, the instrument's position, orientation, and trajectory on medical images such as Ultrasound or CT.
"Image-guided procedures are one of the most important breakthroughs in the healthcare industry in decades. This acquisition allows Philips to significantly enhance its abilities in this rapidly-emerging field, and will help us further realize our ambition to offer the best quality of care in the most efficient way possible," said Steve Rusckowski, CEO of Philips' Healthcare sector.