A Medical Device Daily
Orthopedics firm Orthofix International (Huntersville, North Carolina) reported that it has sold all of the intellectual property, business assets and distribution rights related to the Pain Care line of ambulatory infusion pumps, previously made by its sports medicine subsidiary, Breg (Vista, California).
LMA International (Singapore) has agreed to pay about $5.9 million in cash upon transaction close, and an additional $1 million based on attaining certain revenue-generation objectives during the first six-months after the closing.
As part of the transaction, Breg will continue to manufacture the Pain Care products for LMA during a transition period of up to 18 months.
Orthofix indicated that its previously reported 2008 financial expectations for Breg excluded any contribution of revenue or earnings from operations related to its Continuous Passive Motion business, which was sold in January of this year, as well as its Pain Care products. These two product lines generated a total of about $6.6 million in revenue in 2007.
The company said the sale is part its goal of narrowing the focus of its sports medicine business to the functional knee bracing and cold therapy markets, where it says it currently holds a No. 2 market share positions.
“Breg had outstanding results in 2007, with revenue growth of 11%, which was significantly in excess of the overall sports medicine market,” said Orthofix CEO Alan Milinazzo. “We believe that by increasing our focus on our core businesses we can further strengthen our position within the functional knee bracing and cold therapy markets.”
In other deal activity: Unidym (Menlo Park, California), a subsidiary of Arrowhead Research (Pasadena, California), reported the formation of a spin-off company, Ensysce Biosciences, to focus on research into the therapeutic applications of carbon nanotubes. Unidym has licensed its extensive nanotechnology patent portfolio to Ensysce for this field of use. In return it holds a significant equity position in Ensysce.
Specific terms of the arrangement agreement were not disclosed, but include up-front licensing fees, ongoing royalties and a “significant” equity position for Unidym in Ensysce.
Unidym will provide contract services to Ensysce, including supplies of research grade nanotubes and back-office and accounting support.
The inception of Ensysce stems from the final research interests of the late Dr. Richard Smalley, the 1996 Nobel Laureate for Chemistry from Rice University (Houston), one of the pioneers in considering the therapeutic potential of carbon nanotubes. Unidym acquired rights to Smalley’s work in carbon nanotechnology through a corporate merger last April.
“Unidym’s carbon nanotubes have been widely used in a variety of very promising medical therapeutic research,” said Art Swift, Unidym’s president/CEO. “Given the broad applicability of our IP portfolio, it was a natural move to create this spin-off company to, over time, return previously untapped value to Unidym’s shareholders by focusing on the application of our intellectual property in medical therapeutics for the systemic treatment of disease, an area that is outside Unidym’s core business focus on electronics applications for carbon nanotechnology.”