A Medical Device Daily
Arbios Systems (Waltham, Massachusetts) reported that it has sold all its rights and interest in its bioartificial liver system, HepatAssist, to HepaLife Technologies (Boston), a company developing cell-based medical technologies.
The terms of the deal include payment of $450,000 in cash and a five year warrant to purchase 750,000 shares of HepaLife's common stock. Arbios received $250,000 at the closing and will receive another $200,000 on the earlier to occur of: the date on which HepaLife, in the aggregate, raises $4 million of proceeds from debt or equity financings, or the 18-month anniversary of the closing of this transaction.
HepaLife said that the assets will strengthen its patented PICM-19 porcine liver cell line-supported bioartificial liver technololgy. Among the assets acquired by HepaLife are: more than 12 patents and patent licenses; miscellaneous equipment; an FDA Investigative New Drug Application, including orphan drug and fast track designation; Phase I and Phase II/III clinical protocols; clinical data from human patient trials; and standard operating procedures for manufacturing and quality control.
The move by Arbios to sell the system came exactly two months after the struggling firm said it was suspending its operations to conserve cash while it sought financing or some relationship to fund clinical trials for its Sepet liver assist device (Medical Device Daily, Aug. 7, 2008).
With suspension of operations, all Arbios employees were released, except for Shawn Cain, president/CEO, and Scott Hayashi, CFO, who remained as part-time consultants on a month-to-month basis to seek funding and "strategic alternatives."
Cain said that the cash received upon sale close "will be used to continue our efforts to obtain financing or a strategic partnership for Sepet, our liver assist device, and/or another transaction that will maximize value for our shareholders. We will be continuing our efforts by reaching out to potential additional interested parties."
Arbios also entered into a three month consulting agreement with Cain, for him to identify and engage prospective purchasers, licensors and investors and negotiate the terms of any potential transactions.
Frank Menzler, president/CEO of hepaLife, said he sees the Arbios technology acquisition as a game changer for his company.
"The complexion of our company has changed dramatically as a result of this acquisition, and the prospects for substantially cutting our time-to-market for a commercial bioartificial liver device have become very real," he said. "This move significantly improves our market position, and marks a very important milestone in the research and development of our bioartificial liver."
With acquisition of the HepatAssist technology, HepaLife reported plans to deploy an enhanced product development program and re-organization of its bioartificial liver device development activities.
The company said it has notified the U.S. Department of Agriculture, Agricultural Research Service (USDA/ARS) that it has elected to terminate the cooperative R&D agreement between it and the USDA/ARS, effective Nov. 30. The exclusive license agreement for the PICM-19 liver cell line with the USDA/ARS for the use of patented liver cell lines in artificial liver devices and in vitro toxicological testing platforms remains in force.
Last month, HepaLife reported expansion of this license, allowing for the additional use of PICM-19 cells as an in vitro infection host system for viral and protozoan agents such as malaria.
In other dealmaking news:
• LLR Partners (Philadelphia), an equity investment firm with more than $1.4 billion under management, said it has provided equity capital to RecoverCare (Radnor, Pennsylvania) for RecoverCare's acquisition of T.H.E Medical (Barrie, Ontario).
RecoverCare is a supplier of bariatric, wound care and patient handling products and services to acute care and long-term acute care (LTAC) hospitals, skilled nursing facilities, rehabilitation hospitals, hospice and home care patients. T.H.E. makes patient handling and transfer equipment, and provider of related services, for acute care, LTAC, and long-term care.
RecoverCare said the acquisition provides it a product design and manufacturing platform in the "high-growth" market for safe patient handling.
Tom Smith, president of RecoverCare, said, "T.H.E. has a very broad and effective product line, and excellent product development and product sourcing capabilities. Safe patient handling is in its infancy in the United States and will undergo immense growth in the coming years."
• Eclipsys (Atlanta) reported completing its purchase of MediNotes (West Des Moines, Iowa), a provider of physician practice information solutions, and has made it a wholly owned subsidiary.
Eclipsys paid about $45 million for MediNotes, 39% in cash and 61% in Eclipsys stock, and the retirement of certain arrangements surviving from the acquisition by MediNotes of Bond Technologies (Chaska, Minnesota), and affiliates in February (MDD, Feb. 28, 2008).
Eclipsys reported its agreement to acquire MediNotes in September to support its provision of solutions that help health systems connect with physicians, physicians with their patients.
Eclipsys said it will formally launch the MediNotes solutions and outline its community strategy at the Eclipsys User Network outcomes conference this week in Atlanta.
• Invitrogen (Carlsbad, California) reported filing a formal notification to the European Commission (EC) concerning its pending acquisition of Applied Biosystems (Foster City, California). The EC has 25 business days following the date of notification to respond to the filing.
The company said it continues to expect the transaction to close in November, subject to shareholder and EC approvals.
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