After raising about $83 million in venture funding, SurgRx (Redwood City, California), developer of a vessel fusion system used in electrosurgical devices, has agreed to be acquired by Ethicon Endo-Surgery (Cincinnati), a Johnson & Johnson (New Brunswick, New Jersey) company.
Financial terms of the deal were not disclosed and the deal is subject to approval by both U.S. and overseas regulators.
Ethicon said the acquisition would provide it with a new energy platform, which compliments its Harmonic line of ultrasonic medical devices that have been used to perform open and laparoscopic procedures worldwide.
"Ethicon Endo-Surgery and SurgRx share a commitment to innovation for the surgeons and patients who depend on our products," said Karen Licitra, company group chairman and worldwide franchise chairman at Ethicon. "Together, the combination of Harmonic and EnSeal technologies will position us to better address many different procedure needs."
SurgRx was founded in 2002 and has developed the EnSeal system, which uses specific amounts of heat and energy to seal vessels during laparoscopic and open surgery. The company began sales in 2004. The EnSeal device, cleared by FDA in 2003, is capable of sealing vessels up to 7 mm in diameter, according to the company.
"The acquisition has the potential to expand the global availability of the EnSeal product line," said Rodney Perkins, MD, chairman of SurgRx.
Ethicon makes devices for minimally invasive and open surgical procedures, focusing on procedure-enabling devices for the interventional diagnosis and treatment of conditions in general and bariatric surgery, as well as gastrointestinal health, gynecology and surgical oncology.
SurgRx's $83 million in venture backing included a $20 million Series F in April 2007 led by hedge fund Magnetar Capital, and a $19.8 million Series G from insiders in April 2008.
Other investors in SurgRx included Alta Partners, New Enterprise Associates and Prospect Venture Partners.
"The company made very good progress in terms of launching its initial products and gaining surgeon acceptance," Alison de Bord, a director for Alta Partners, told Medical Device Daily. "It will be great for the company to be in a larger company's hands with a larger sales force."
de Bord said the technology has applications "all across the board" and has been accepted by surgeons from a variety of fields.
Alta led the company's $12 million Series D financing in 2004 (Medical Device Daily, Sept. 8, 2004), which followed a $4.5 million C round from Prospect (MDD, March 15, 2004).
de Bord said Alta also led the company's E round and participated in two more cross-over rounds. She spoke highly of the management team at SurgRx for "perfecting" the technology and also for building a good and sizable sales force to the point that a large company like J&J was interested in it.
In other dealmaking activity:
Bederra (Houston), a medical imaging and diagnostic company, said that its subsidiary Lumar Imaging (also Houston) will offer nuclear imaging services in areas such as cardiac, bone, brain, thyroid, gastrointestinal and a variety of other specialized imaging tests, as part of a joint-venture agreement with Advanced Nuclear Consultants (Houston).
According to the company, the non-invasive nature of nuclear medicine imaging systems makes it favorable for doctors and patients and demand for nuclear medicine is on the rise. The North American nuclear medicine market earned revenues of more than $18 billion last year and is expected to reach $20 billion in 2014, according to estimates by Frost & Sullivan.
"Since diagnostic imaging is the precursor to nuclear imaging, our JV with Advanced Nuclear is ideal for extending the doctor referral network," said Graham Williams, CEO of Bederra.
Williams said Bederra expects the j-v will bring in an additional $1 million a year for Lumar.
Advanced Nuclear Consultants provides national sales, service and technical support for nuclear imaging systems. The company specializes in nuclear medicine consulting for private practice, diagnostic imaging centers and hospitals.
"Our joint venture is a monumental occasion for us and we are all excited about the long-term opportunities to better serve our community with exceptional levels of healthcare services through Lumar Imaging," said Richard Armijo, president of Advanced Nuclear Consultants.
Lumar is a six-year-old facility that provides MRI, CT, ultrasound and pain management services to the greater Houston area.
Bederra provides multiple modality diagnostic medical imaging services to the greater Houston area. The company plans to continue to expand its operations and seek out additional acquisitions that will compliment its core offerings.
Emergency Medical Services (Greenwood Village, Colorado) said it has completed its acquisition of the management services entity of Clinical Partners (Newington, Connecticut), a provider of anesthesiology services, as well as an associated billing company.
The two entities are now subsidiaries of EmCare, and will provide anesthesiology practice management services to hospitals compromising recruitment of doctors and certified registered nurse anesthetists, risk management, billing and collection, and other services. EmCare is the company's emergency department and hospital-based management services segment.
Care Investment Trust (New York), a real estate investment and finance company investing in healthcare-related real estate and commercial mortgage debt, reported an agreement in principle with its external manager, CIT Healthcare (New York).
Care will receive an option to require CIT to buy up to $125 million of mortgage assets on an individual basis at any time over the next 12 months.