A Diagnostics & Imaging Week
Abbott Laboratories (Abbott Park, Illinois) reported that it has exercised its option to purchase the remaining equity ownership in Isis Pharmaceuticals subsidiary Ibis Biosciences (both Carlsbad, California) for a closing purchase price of $175 million. In addition to the closing purchase price, Isis will receive earn-out payments from Abbott tied to post-closing sales of Ibis systems, including instruments and assay kits.
Earlier this year, Abbott invested $40 million in Ibis in exchange for about 18.6% of Ibis' outstanding equity. This investment, along with the $175 million that would be due at closing, would result in a total acquisition price of $215 million plus earn-out payments.
The closing of the acquisition of the remaining equity ownership in Ibis is subject to the satisfaction of the terms and conditions of a stock purchase agreement that has been executed by the parties, including obtaining U.S. antitrust clearance and is expected to occur in January.
"Abbott's confidence in Ibis is reflected in its decision to invest in [our] technology and to exercise its option to purchase Ibis. We have already presented development plans for the next-generation instrument that will facilitate our rapid growth into clinical diagnostics," said Michael Treble, president of Ibis. "This year we have made substantial progress by advancing our broad pathogen detection and characterization capabilities and establishing a foundation for our commercial clinical diagnostic products. We look forward to continuing this progress."
Stafford O'Kelly, vice president, molecular diagnostics at Abbott, said, "The broad applicability of Ibis' technology has been demonstrated in biodefense applications, microbial forensics and infectious disease detection and surveillance, and we believe that it has the potential to be a powerful tool in the detection and surveillance of infectious diseases in the hospital and clinical settings.
Ibis Biosciences has developed and is commercializing the Ibis T5000 biosensor system for rapid identification and characterization of infectious agents. The Ibis T5000 is currently intended for research use only and not for use in diagnostic procedures.
It is capable of identifying virtually all bacteria, viruses and fungi, and can provide information about drug resistance, virulence and strain type of these pathogens. Commercial applications for the Ibis T5000 Biosensor System include epidemiologic surveillance, monitoring of pandemic diseases, identification of emerging or previously unknown pathogens, forensic characterization of human samples, identification of sources of hospital-associated infections, and, in the future, human infectious disease diagnostics.
In other dealmaking activity:
• CMT Medical Technologies (Yokneam, Israel), a developer of high-resolution digital imaging solutions for the medical industry, said its board will support an offer made by Thales Group (Neuilly-sur-Seine, France), an international electronics and systems company, to buy 50.1% to 100% of CMT shares for €5.65 a share in cash. The deal values CMT at €21.5 million. Thales reported launching the takeover bid earlier this week.
Thales makes components and subsystems for professional applications, including hardware and software for medical radiology equipment. CMT will become an entity in the Thales Group and business line, augmenting Thales' portfolio in the medical imaging sector with new products and pipeline potential.
CMT said that Thales' strong brand recognition and reputation, as well as its worldwide sales and distribution network, would provide more opportunities and increased visibility when marketing full digital imaging packages.
"This offer by Thales, in line with the long-term strategic plan outlined for CMT, will enable us to secure our leadership in the field of medical imaging by leveraging our R&D strengths with Thales' technological knowledge, as well as by opening new, much broader channels for sales and distribution of our products worldwide," said CEO Amit Meridor. "Our employees will greatly benefit from the broad, dynamic global resource pool of Thales while our customers will gain directly from the enlarged product and service offerings."
According to the company, the offer reflects CMT's "significant assets as a leading innovator" and developer of high-resolution digital imaging solutions, acknowledging the value of its "highly trained managerial, research and technical staff."
CMT makes digital image processing systems for use in medical diagnostic imaging applications. The company is also engaged in the development of X-ray detectors for various medical applications.
• Emageon (Birmingham, Alabama) reported that its stockholders have approved its proposed merger with Health Systems Solutions (Tampa, Florida). A closing date has not yet been set and financial terms were not disclosed.
Emageon provides information technology systems for hospitals, healthcare networks and imaging facilities.
• Patterson Companies (St. Paul, Minnesota) reported the acquisition by its Patterson Dental Supply unit of Dolphin Imaging Systems and Dolphin Practice Management (both Chatsworth, California), providers of 3-D imaging and practice management software for specialized dental practitioners, including orthodontists, oral maxillofacial surgeons and dental radiologists.
Terms of the all-cash deal were not disclosed.
With estimated sales of about $13 million, Dolphin is profitable and debt-free, Patterson said.
According to the company, Dolphin's imaging software maximizes the benefits of cone beam and other digital photography and radiography systems by enabling practitioners to electronically capture, manipulate and analyze imaging records; perform diagnosis and advanced 2-D and 3-D visualization; and graphically simulate treatment outcomes.
Dolphin's products support most cone beam systems, digital radiography systems, 2-D and 3-D digital photographic systems, and picture archiving and communications systems, the company said.
Dolphin's orthodontic practice management software manages workflows, patient scheduling and financial systems.
• Myriad Genetics (Salt Lake City) says it will spin off its research and development business from its molecular diagnostics business to form two public companies, Myriad Pharmaceuticals and Myriad Genetics.
The spinoff is intended to help the companies "excel in their respective fields," acknowledging the different needs of a high-growth, profitable molecular diagnostics business and a pharmaceutical R&D business, the company said.
"By separating these businesses we believe each company will be better-positioned to deliver on their strategic visions and address their diverse operational and capital needs," Peter Meldrum, president/CEO of Myriad Genetics, said during a company conference call Tuesday. "Furthermore we believe this will be able to unlock the intrinsic value of both companies while giving each company the necessary resources to max their respective commercial opportunities."
Meldrum said the company plans to accomplish the separation of these businesses through a tax-free pro-rata dividend distribution to shareholders of Myriad Genetics during the first half of next year.
"We are excited about the future of both our molecular diagnostics business and our pharmaceutical business and we believe that this new strategic direction will allow each business to achieve its full potential," Meldrum said.
The company expects Myriad Genetics to trade on the New York Stock Exchange and Myriad Pharmaceuticals, a newly formed company, to be listed on the Nasdaq Global Market.
After the spinoff, Myriad Genetics will have 800 employees and five marketed products – BracAnalysis, Colaris, Colaris AP, Melaris and TheraGuide 5-FU. It will focus on predictive and personalized medicine.
Myriad Pharmaceuticals will have 200 employees and will research and develop cancer and infectious disease drugs. It currently has four drug candidates in human clinical trials.
Myriad has retained J.P. Morgan as its financial advisor, Mintz Levin Cohn Ferris Glovsky and Popeo, P.C. as its legal advisor, and Ernst & Young as its accounting and tax advisor.
• MTS Health Investors (New York), a healthcare private equity firm, has bought DNA Diagnostics Center (DDC; Fairfield, Ohio) and related entities from founder Dr. Richard Lee. Financial terms were not disclosed.
According to MTS, DDC is one of the "largest and most reputable" DNA testing laboratories worldwide and the market leader in human DNA identification testing for the private sector. The company provides DNA testing services in the fields of biological family relationships, forensics and veterinary genetics.