A Diagnostics & Imaging Week
Mindray Medical International (Shenzhen, China) said it has completed its acquisition of Datascope's (Montvale, New Jersey) patient monitoring device business. The deal was first disclosed in March.
The deal has a pre-tax value to Datascope of $240 million. Mindray paid $209 million in cash and Datascope retained about $31 million in patient monitoring accounts receivable.
The combined business benefits from Mindray's integrated engineering and manufacturing platforms, Datascope's established brands, reputable products and services and extensive direct sales and service capabilities in the U.S. and Western Europe, the company said.
"This transaction ensures sustainable high growth for our international business and gives us immediate access to an established network of hospital customers in the U.S., the world's single largest healthcare market," said Xu Hang, Mindray's co-CEO and chairman. "We're optimistic about the growth potential of our combined business and believe we are now even better positioned to address the growing trend of cost-conscious healthcare spending worldwide."
Mindray said it expects to achieve more than $30 million in run-rate synergies from the acquisition in the areas of manufacturing, SG&A and R&D in 2011.
Mindray offers products across three primary business segments: patient monitoring & life support products, in-vitro diagnostic products, and medical imaging systems.
In other dealmaking news:
• Volcano (Rancho Cordova, California), a provider of IVUS, FM and OCT products designed to enhance the diagnosis and treatment of coronary and peripheral vascular disease, said it has acquired Novelis (Methuen, Massachusetts), a privately held company with ultrasonic visualization and therapy technology for minimally invasive diagnostic and therapeutic devices.
Volcano paid about $12 million in cash at closing. It may make an additional cash payment of $3 million based on the achievement of a specific regulatory milestone.
Volcano said that Novelis' proprietary IVUS technology platform is expected to build upon its existing suite of products and further enhance Volcano's position as an imaging technology leader in the field of interventional medicine by enabling forward-looking IVUS and associated therapies in the interventional cardiology market.
It said it expects to add the Novelis products and capability onto its s5i multi-modality integrated platform/hub.
Novelis' core product line is based on Forward-Looking Intravascular Ultrasound (FLIVUS) technology. The line includes an image-guided crossing catheter that combines visualization, steerability and RF tissue ablation, which is designed to permit interventional cardiologists to safely cross chronic total occlusions (CTOs) in the coronary and peripheral arteries, and a FLIVUS catheter (imaging-only version) to facilitate current guidewire-based CTO crossing techniques, as well as other potential product offerings with possible applications outside of vascular medicine.
The companies said they believe this platform technology may have applications for numerous minimally invasive procedures, including plaque modification in the coronary or peripheral arteries, guidance in structural heart procedures, including cardiac ablation guidance and therapy, breast biopsy guidance and therapy, and orthopedic (spine) guidance and therapy.
"Novelis' technology has potential applications for a number of minimally invasive diagnostic and therapeutic applications in the coronary and peripheral arteries, including the treatment of CTOs," said Scott Huennekens, president/CEO of Volcano. "It is estimated there are over 200,000 CTOs performed in the U.S., Europe and Japan each year. The products under development by Novelis have the potential to shorten procedure times and minimize complications plus dramatically add to the total number of procedures being performed — enabling patients with CTOs to be treated in the cath lab rather than in the surgery suite. "
Huennekens estimated that the total market potential for Novelis' CTO products is more than $500 million.
Volcano said it expects to file for appropriate U.S. and international approvals on the first of several devices during 2009 and begin commercialization of a stand-alone imaging console in the second half of 2009 in the U.S. and Europe. It said it expects a majority of the purchase price to be written off immediately as in process research and development and to incur ongoing development costs in the range of $300,000 to $400,000 per quarter.
• Elron Electronic Industries (Tel Aviv, Israel) said it is beginning a tender offer to buy about 1.46 million ordinary shares of Given Imaging (Yokneam, Israel) for $16.54 a share in cash.
If the tender offer is completed, Elron would pay Given Imaging an aggregate of about $24.19 million. If more than the maximum number of shares offered are tendered the company will buy shares on a pro rata basis.
Elron currently owns 8,002,180 Given Imaging shares, or roughly 27.4%. When taken together with Given Imaging shares owned by Elron affiliates the company owns 12,721,708 shares, or about 43.5%. If the offer is completed, Elron will own about 32.4% of the issued and outstanding Given Imaging shares or 48.5% when taken together with the shares owned by its affiliates.
Elron's offer represents a 5% premium from last Thursday's closing price of $15.75 on Nasdaq.
The initial period of the tender offer and withdrawal rights are scheduled to expire at 10 a.m., EST, or 5 p.m., Israel time, on June 16, unless extended by Elron.
• Covidien (St. Louis), a provider of healthcare products, reported that it has signed an agreement with privately held Pinyons Medical Technology (Park City, Utah), and its president/CEO, Shawn Fojtik, to acquire all assets related to the Pinyons PowrSyringe Injector and PowrSyringe Monitor handheld, manual injection and inflation devices.
These devices facilitate manual X-ray contrast media injections during angiography procedures performed in the cardiac cath lab and interventional radiology suite.
"The acquisition of the Pinyons products is important strategically to our delivery systems business," said Steve Hanley, president, imaging solutions at Covidien. "The hand-held, manual injector adds a novel delivery system technology to the products we offer our customers and provides a platform for future innovation."
Covidien immediately obtains all assets related to these two Pinyons product lines, including all intellectual property, current and future product designs and regulatory filings and approvals. The injection and inflation devices have received clearance from FDA.
Covidien manufactures product lines in four segments: Medical Devices, Imaging Solutions, Pharmaceutical Products and Medical Supplies.
• McKesson (Atlanta) said it has acquired Vivalog (Seattle), a provider of web-based solutions, including its MyPACS.net medical imaging reference site, designed to enable imaging specialists to efficiently organize and share image and reference case information needed during daily practice. According to the company, this portfolio extends current hospital imaging and information management systems with reference case management and clinical conferencing capabilities that result in rich, multimedia knowledge repositories to assist in diagnostics as well as research and training.
McKesson is a healthcare services and information technology company.
• Acusphere (Watertown, Massachusetts) reported that it had completed the renegotiation of payment terms under certain intellectual property agreements. Payments due in the 12 months ending March 31, 2009, have been reduced by $3.5 million and shifted out by the same amount to later in 2009.
The company said it expects a full response letter from FDA on its recently filed NDA for Imagify (Perflubutane Polymer Microspheres) for Injectable Suspension, on or around the Prescription Drug User Fee Act date in 1Q09.
Lawrence Gyenes, CFO of Acusphere, said, "We are very pleased to reach these agreements. They allow us to conserve cash, as we continue to work diligently on a range of potential strategic partnership and financing alternatives to fund our on-going business operations."
Under the revised payment terms, the company said it now expects to make the following IP payments: $1.1 million in 2Q08 and $800,000 in 3Q08. All other IP payments, including accrued interest, are due on or after May 2009.
Acusphere is a specialty pharmaceutical company that develops new drugs and improved formulations of existing drugs using its microsphere technology. Its lead product candidate, Imagify, is a cardiovascular drug for the detection of coronary artery disease, for which a New Drug Application was submitted to the FDA in April. Imagify is designed to enable ultrasound to compete more effectively with nuclear stress testing, the leading procedure for detecting coronary artery disease.