A Diagnostics & Imaging Week

Opto Circuits (Bangalore, India) reported that it has entered into a definitive agreement to acquire Criticare Systems (Waukesha, Wisconsin) for $5.50 per share, for an aggregate price of about $68 million (including debt and cash).

The offering price represents a premium of 65% to the average price of Criticare common stock over the preceding three months and a premium of 19% to the closing price of Criticare common stock on Friday of $4.62.

A wholly-owned subsidiary of Opto will make an all-cash tender offer for all outstanding shares of Criticare common stock and then merge with Criticare. The board of Criticare has unanimously recommended that its stockholders accept the offer and tender their shares.

“We are delighted to expand our presence in patient monitoring through this acquisition,” said Vinod Ramnani, chairman and managing director of Opto Circuits. “This transaction will open many new global markets for Criticare’s products and will greatly enhance Opto Circuits’ product offering and presence in the U.s.”

Opto Circuits must acquire 65% of Criticare’s outstanding shares in order for the merger to be consummated.

Although the definitive agreement contains restrictions on Criticare’s ability to solicit and initiate discussions with third parties regarding other proposals to acquire it, the company’s board said it is allowed in certain circumstances under the terms of the agreement to respond to an unsolicited offer to acquire Criticare if the unsolicited offer is reasonably likely to be more favorable to its stockholders than the Opto offer.

In the event of termination of the merger agreement under specified circumstances, Criticare will be required to pay Opto a termination fee of $1 million. In the event that Opto is unable to secure financing, the merger agreement may be terminated by Criticare and Opto will owe Criticare a termination fee of $1 million.

Upon completion of the merger, Criticare will become a wholly-owned subsidiary of Opto Circuits.

Roth Capital Partners acted as financial advisor to Criticare in the transaction and delivered a fairness opinion to Criticare’s board.

Opto Circuits is a manufacturer of healthcare equipment whose products include digital thermometers, sensors, probes, pulse oximeters, patient monitoring systems, cardiac stents and catheters.

Criticare designs patient monitoring systems and noninvasive sensors for a wide range of hospitals and alternate healthcare environments.

Mobile Anesthesiologists Holdings (MAS; Mobile) reported the spin-off of its procurement operation into an independently operating company to be known as Pro Cure.

The new company will provide procurement services to the “alternate-site” market comprised of office-based practices as well as smaller chain and independent ASCs that it said have been traditionally overlooked by the large group purchasing organizations.

MAS says that the alternate site market is the fastest growing segment in healthcare as an increasing number of surgical and diagnostic procedures are being migrated from hospitals.

Historically, most independent practitioners and facilities have not had access to GPOs like their large hospital and medical organization counterparts and so have been unable to leverage their combined buying power to obtain discounted pricing from distributors. Instead, they are forced to pay significantly higher prices because they lack the purchasing volume as well as the resources to dedicate to the purchasing function.

Recently, Pro Cure was officially spun off from MAS, with Scott Mayer as president and Richard Harris as executive chairman.

“By the end of 2008, we expect to be serving a minimum of seven different medical specialties in more than a dozen states across the U.S,” said Mayer

Pro Cure said it has established relationships with many of the key pharmaceutical and med-surg supply companies such as Hospira, HD Smith, eSurg, Cardinal Health, Medline, MedAssets/Amerinet and Curascript as well as beneficial relationships with other popular suppliers including OfficeMax and Verizon Wireless.

In other dealmaking activity:

• RadNet (Los Angeles), a diagnostic imaging company, reported an agreement to buy the assets of six Los Angeles imaging centers from InSight Health (Lake Forest, California) for $8.5 million in cash.

A portion of RadNet’s recently completed incremental term loan provided by GE Healthcare Financial Services will fund the purchase, the company said.

The operations of the to-be-acquired centers produce about $10 million in annual revenue, RadNet said. The centers include InSight’s centers in Simi Valley, Thousand Oaks, Westlake, Encino, Van Nuys and Valencia. The facilities operate a combination of imaging modalities, including MRI, CT, X-ray, ultrasound and mammography.

“Our existing strong presence in many of these markets positions us to uniquely benefit from consolidation and cost savings available in this transaction. The acquisition further strengthens our leadership in many of these local markets and is consistent with our strategy of market penetration, regional concentration and multimodality services,” said Howard Berger, MD, president/CEO of RadNet.

“With so many growth and acquisition opportunities available to us, we are attempting to optimize our use of capital. This very accretive transaction exemplifies the nature of the tuck-in deals that we feel are most advantageous to our growth and future valuation,” Berger said.

The acquisition is expected to close in March.

Radnet provides diagnostic imaging services through a network of 155 outpatient centers. Its core markets include California, Maryland and New York.

InSight, also a provider of diagnostic imaging services, serves managed care entities and hospitals.

• Sigma-Aldrich (St. Louis) and NeuroSurvival Technologies (NST; Petach-Tikva, Israel) reported an agreement for a marker, developed by NST, for molecular imaging of apoptosis in vitro and in vivo in animals.

The marker, developed by NST, will be made and marketed by Sigma-Aldrich under the commercial name Apo-TRACE, the company said. Apo-TRACE is a member of a family of small molecules developed by NST that target apoptosis. Another molecule of the family, ApoSense-PET, is in clinical trials for imaging apoptosis in vivo in humans with positron emitting tomography (PET) and is not part of the agreement, the company said.

Apoptosis (programmed cell death) is a fundamental biological process of cell “suicide”, inherent in every cell in body, according to NST. Apoptosis has an important role in almost any medical disorder, and its control may hold the promise for substantial advances in medical care for a wide array of disorders, from cancer, myocardial infarction and cerebral stroke, to neurodegenerative disorders such as Alzheimer’s disease, the company said.

Sigma-Aldrich is a life science and high technology company. Its biochemical and organic chemical products and kits are used in scientific and genomic research, biotechnology, pharmaceutical development, the diagnosis of disease and as key components in pharmaceutical and other high technology manufacturing.

NST is a clinical stage molecular imaging and drug development company, focused on the introduction of agents based on the identification and targeting of cells undergoing apoptosis.

• Xenomics (Monmouth Junction, New Jersey) reported that it has granted Warnex Medical Laboratories (Laval, Quebec), a division of Warnex (Laval), non-exclusive rights in Canada to offer NPM1 testing as a laboratory service for the diagnosis, stratification and monitoring of patients with acute myeloid leukemia (AML).

AML is a heterogeneous disease with about 200,000 new cases a year worldwide. The disease subgrouping by karyotypic abnormalities indicates patient prognosis. However, in almost half of AML cases the karyotype appears normal and provides no guide for the physician. A recent discovery showed that many AML patients have mutations in the NPM1 gene, a favorable marker for clinical outcome.