A Medical Device Daily

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 (Medical Device Daily, Feb. 26, 2008).

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, hospitals and other contractual customers in more than 30 states in the U.S.

In other dealmaking activity:

• Patriot Scientific (Carlsbad, California) said that Advanced Medical Optics (AMO; Santa Ana, California) has purchased a Moore Microprocessor patent portfolio license from the TPL Group, Patriot’s licensing partner.

AMO makes devices for the eye, including diagnostic instruments and products used in ocular surgery and laser vision correction.

According to Patriot, more than 40 companies from the U.S., Europe, Japan, Korea and Taiwan have licensed the Moore Microprocessor patent portfolio technologies. The portfolio includes seven U.S. patents as well as their European and Japanese counterparts.

Patriot develops technologies for an array of markets, including biomedical devices.

• 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 noted.

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.

• The U.S. Department of Justice reported that it would require UnitedHealth Group (Minnetonka, Minnesota) and Sierra Health Services (Las Vegas) to divest assets relating to United’s Medicare Advantage business in the Las Vegas area in order to proceed with United’s acquisition of Sierra.

The Justice Department said the transaction, as originally proposed, would have created a combined company controlling 94% of the Medicare Advantage health insurance market in the Las Vegas area and resulted in higher prices, fewer choices, and a reduction in the quality of Medicare Advantage plans purchased by senior citizens in that area.

The department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the lawsuit and the department’s competitive concerns.

Individuals eligible for Medicare may elect to enroll in a privately provided Medicare Advantage plan instead of traditional Medicare. Medicare Advantage plans are intended to offer affordable rates, coverage, and benefits not available through traditional Medicare. Roughly 82,000 people in Clark and Nye counties, which make up the Las Vegas area, are enrolled in Medicare Advantage plans, accounting for about $840 million of annual commerce, according to the Justice Department.

The original transaction would have eliminated competition between United and Sierra, the largest sellers of Medicare Advantage plans in the Las Vegas area, the department said. Under the proposed settlement, United must promptly divest most of its assets relating to its Medicare Advantage business in the Las Vegas area. The Justice Department has tentatively approved Humana as the acquirer, and United must first attempt to sell the assets to Humana before selling to another purchaser, according to the department.

Enrollees of United’s Medicare Advantage plans will continue to have substantially the same access to providers, including doctors, hospitals, and other medical services, after the divestiture as before.

The department said it worked closely with the Nevada Attorney General’s office in its investigation of the United-Sierra merger.