A Medical Device Daily
Boston Scientific (Natick, Massachusetts) reported completing the sale of the controlling interests in its auditory business and drug pump development program to former principals and shareholders of Advanced Bionics (AB; Valencia, California), a company it acquired in 2004.
The sale coincides with the closing of the amended merger agreement with AB, reported on Aug. 9, 2007 (Medical Device Daily, Aug. 2007).
As part of a new schedule of consolidated, fixed earnout payments, Boston Scientific has paid former AB shareholders $650 million. A final payment of $500 million will be made in March 2009. The former Advanced Bionics principals and shareholders have paid Boston Scientific $150 million for the controlling interests in the auditory business and drug pump development program.
Boston Scientific acquired AB in June 2004 (MDD, June 2, 2004) for $740 million in cash and the promise of future milestones, but the subsequent relationship was rocky, primarily litigation with AB management, primarily entrepreneur Alfred Mann, who accused the company of trying to push him out.
To extricate itself from the deal Boston scientific paid AB executives $1 million, and an additional earn-out of $360 million.
With conclusion of the spin-off agreement AB again will be an independent company, with businesses in cochlear implants and its development program in drug pumps.
Boston Scientific obtains sole management control of the Pain Management business, including the emerging indications program. The Pain Management business includes spinal cord stimulation technologies, as well as emerging technologies such as applications of the bion microstimulator.
The Pain Management business and emerging indications program will operate as Boston Scientific Neuromodulation under the leadership of Michael Onuscheck, currently head of the Pain Management business. The business will continue to be headquartered in Valencia.
As part of the transactions, the parties have agreed to dismiss pending litigation between Boston Scientific and former Advanced Bionics shareholders.
In other news from Boston Scientific, Osiris Therapeutics (Columbia, Maryland) reported that it has reclaimed from Boston Scientific worldwide rights to cardiovascular indications for Prochymal and terminated its development and commercialization agreement with Boston Scientific. Osiris said the move gives it greater flexibility “to enter more strategically beneficial relationships.”
Osiris regains worldwide rights to its technology for all cardiovascular indications, agreeing to relieve Boston Scientific of a $50 million loan obligation and $45 million in development payments. Additionally, Osiris will repay a $5 million debt, plus accrued interest, in four quarterly installments.
“This step was critical to realizing the full value of our proprietary stem cell technology,” said C. Randal Mills, PhD, president/CEO of Osiris. “Prochymal continues to demonstrate therapeutic utility across multiple disease states, as evident by our recent Defense Department contract for acute radiation syndrome.
As a result of this move, we now have the freedom to enter into territory-specific, rather than indication-specific collaborations for Prochymal. This also allows us to accelerate the development of Prochymal for the treatment of acute myocardial infarction, which produced very encouraging results in early clinical trials.”
Osiris is a stem cell therapeutic company focused on developing and marketing products to treatconditions in the inflammatory, orthopedic and cardiovascular sectors.
Prochymal is being evaluated in Phase III clinical trials for three indications, including acute and steroid refractory graft versus host disease and also Crohn’s disease, and is the only stem cell therapeutic currently designated under both orphan drug and fast track protocols by the FDA.
Osiris has also partnered with Genzyme (Cambridge, Massachusetts) to develop Prochymal as a medical counter-measure to nuclear terrorism and other radiological emergencies. Prochymal is also being developed for the repair of heart tissue following a heart attack and for the protection of pancreatic islet cells in patients with type 1 diabetes.
The company’s pipeline of internally developed biologic drug candidates under evaluation also includes Chondrogen for arthritis in the knee.
Osiris has developed capabilities in R&D, manufacturing, marketing and distribution of stem cell products, and it has an intellectual property portfolio in the U.S. and a number of other countries including 47 U.S. and 215 foreign patents owned or licensed.
In other dealmaking activities: Inverness Medical Innovations (IMI; Waltham, Massachusetts) reported completing its acquisition of Panbio (Brisbane, Australia), that deal first disclosed last October (MDD, Oct. 9, 2007).
IMI acquired all outstanding shares for A$41 million (about $37 million).
Panbio makes tests for the diagnosis and management of infectious diseases. In particular, the company claims a leadership position in Dengue Fever diagnostics that will complement IMI’s product portfolio for the rapid diagnosis of blood-borne pathogens.
Panbio says it also provides “the Australian infrastructure required to support IMI’s plans for growth in the region.”