NuVasive (San Diego) has agreed to buy Cervitech (Rockaway, New Jersey), a company focused on clinical approval of the PCM cervical disc system, a motion preserving total disc replacement device. This acquisition allows NuVasive the potential to accelerate its entry into the growing mechanical cervical disc replacement market, the company said. The initial purchase price will be about $47 million, with an additional contingent payment of $33 million upon FDA approval of the device.

"We think highly of where the total disc replacement market is going over the next couple of years ... what this does is it gives us a device that is in the final stages of the approval process," Jason Hannon, senior VP of corporate development, general counsel and secretary, for NuVasive told Medical Device Daily.

Hannon said there are two devices already approved that started the market expansion a little bit and with this purchase NuVasive is looking to be the next company to join this market with an FDA-approved device. He said the company expects to be in the market within the next two years.

The PCM cervical disc system has been used a lot outside the U.S., and there is already some published data on the performance of the device, Hannon said. Also, the company expects to complete the U.S. clinical trial and two-year follow up this fall.

Hannon said the advantage of buying a technology that is already so far along in the regulatory process is that it takes out some of the risk of getting negative outcomes, which could happen with an earlier stage device.

"We believe that the cervical disc replacement market will become one of the fastest growing segments in spine over the next several years as surgeons and patients choose motion preservation over traditional fusion," said Alex Lukianov, CEO and chairman of NuVasive. "The PCM investigational device has the potential to significantly accelerate NuVasive's entry into this important market. Cervitech is running an impressive clinical trial and the published clinical data verifies that the PCM offers significant benefits to patients. The potential approval will further strengthen our cervical product offering and will enable us to continue our trend of taking market share."

Currently, the PCM investigational device is in an FDA-approved clinical trial in the U.S. and the company expects to complete two-year follow up in 4Q09. NuVasive anticipates submitting for FDA approval in 1Q10. The company expects modest sales outside the U.S. in the near term, with product revenue of $100 million annually within three years of U.S. commercialization.

At NuVasive's discretion, all payments may be made in up to 50% NuVasive stock. The transaction will be dilutive in 2009, but the company expects to absorb any dilutive effects in its operations.

"We are very pleased to have NuVasive continue the development of the PCM," said Massimo Calafiore, president of Cervitech. "We thank all those whose efforts have brought Cervitech to this point and we look forward to NuVasive's commercial success with the device."

NuVasive's principal product offering is based on its Maximum Access Surgery, or MAS platform. According to the company, the MAS platform combines four categories of products that collectively minimize soft tissue disruption during spine surgery with maximum visualization and safe, easy reproducibility for the surgeon: NeuroVision, a software-driven nerve avoidance system; MaXcess, a split-blade retractor system; a wide variety of specialized implants; and several biologic fusion enhancers.

This acquisition "solidifies our commitment to being a player in all areas of the spine," Hannon told MDD.

In other dealmaking activity:

• Perlegen Sciences (Mountain View, California), which develops genetic tests that correlate genetic variation to predisposition to disease and drug response, said it has entered a non-exclusive license agreement with Celera (Alameda, California) focused on a family of patents that covers methods of genetic analysis central to creating similar diagnostic products. The agreement grants Celera use of this Perlegen intellectual property as well as use of Perlegen's specific predictive genetic markers on chromosome 9p21 for coronary heart disease, to be included in products marketed by Celera.

Perlegen's genetic analysis intellectual property covers the combination of multi-loci markers to create diagnostic products for determining an individual's predisposition to multi-factorial disease or for ascertaining an appropriate course of treatment. It is expected to allow Celera to detect genetic markers for multi-factorial traits and tightly linked haplotype blocks, facilitate optimal matching of patient cases and controls, and provide methods for managing the massive data sets that accompany these analyses.

Celera said it would pay an upfront payment and royalties on certain sales of testing products.

• Revolutions Medical (RevMed; Mount Pleasant, South Carolina) said it recently signed a worldwide exclusive license with Strategic Product Development for an image guided navigation system that incorporates high accuracy breast biopsies system (BBS) to conventional mammography systems which number more than 50,000 globally. This technology has already received FDA 510K clearance. According to RevMed, BBS facilitates accurate and fast non-palpable lesions and micro calcification localization in the treatment of breast cancer. It is low-cost, standalone stereotactic image-based system, which uses data from a pair of mammograms to enable radiologists to accurately position a localization needle or biopsy tool at the location of suspicious abnormalities in the patient's breast. Revolutions Medical believes that the BBS will offer significant advantages for the localization and biopsy of breast abnormalities. The system can also be modified to leverage existing popular biopsy tools. The technology can be used to provide a technology platform for future development including multi-modal breast imaging for the image fusion of MRI and X-Ray images, the company noted. The BBS will be modified to use Rev Med's safety syringe technology as well, the company said.