A Medical Device Daily

Beckman Coulter (Fullerton, California) yesterday reported that it will acquire the research flow cytometry business of Dako (Glostrup, Denmark), a developer of cancer diagnostics. Dako's flow cytometry unit is based in Fort Collins, Colorado.

Financial terms were not disclosed.

Today's MDD food for med-tech thought

"For those who can safely perform carotid angioplasty and stenting with low rates of complications, then they are ethically able to use this technique, even though there is no proof that it is any better than an endarterectomy or equivalent to it. For those who are not able to obtain good results, then their activity is, at best, unethical."

— Peter Bell, MD, reporting on what he said is the over-use of carotid stenting, at the VEITHsymposium, "Carotid stenting 'over-utilized' in many asymptomatic patients," pp. 1, 7.

Scott Garrett, president/CEO of Beckman Coulter, said, "We are enthusiastic about the opportunity to add Dako's MoFlo XDP high-performance sorter, the gold standard for cell sorting, and the highly capable nine-color CyAn research flow cytometer to our existing portfolio of cytometry instruments. This transaction allows us to offer a more comprehensive range of research solutions to our customers."

Patrik Dahlen, president/CEO of Dako, said, the sell-off "reinforces our strategic intent to create a more focused business in anatomic pathology and tissue-based cancer diagnostics. We believe our flow cytometry instrumentation products are an excellent match for Beckman Coulter and will achieve even greater success when combined with the company's existing flow cytometry infrastructure and reputation for quality, service and support."

Flow cytometry is used to analyze cells in blood and other fluids for both research applications and diagnosis of diseases such as leukemia, lymphoma and HIV. Dako's flow cytometry instrument business workforce of almost 200 people includes sales, marketing, research, manufacturing and administrative personnel.

The transaction is expected to close by the end of the year.

Beckman Coulter said that more information about the deal will be made available during its 2007 business review meeting Dec. 11.

Dako develops instruments, reagents and software designed to reduce the time from biopsy to diagnosis, improve the quality and reliability of diagnosis, and increase efficiency in the lab.

In other dealmaking news:

  • Inverness Medical Innovations (IMI; Waltham, Massachusetts) reported completing its acquisition of Alere Medical (Reno, Nevada) for $302 million, consisting of about $128 million in cash and $174 million in IMI common stock and assumed options. Alere provides health and care management services and programs to healthcare organizations helping patients with chronic illnesses to manage their conditions. IMI is a developer of rapid point-of-care diagnostics. The deal was first unveiled last month (Medical Device Daily, Oct. 25, 2007).
  • Cognizant Technology Solutions (Teaneck, New Jersey), a provider of global IT and business process outsourcing services, said it has completed the acquisition of marketRx (New Jersey), a provider of analytics and related software services to global Life Sciences companies in the pharma, biotech and medical devices segments. Cognizant said it will make the acquisition with about $135 million in cash, to be funded from current cash reserves. The deal was first disclosed last month (MDD, Oct. 22, 2007). With more than 430 employees in the U.S., India and Europe, marketRx says it is focused on helping companies improve the effectiveness of their sales and marketing operations. Cognizant is a provider of information technology, consulting and business process outsourcing services.
  • CHAD Therapeutics (Chatsworth, California) said it will sell all assets related to its oxygen conserver business, including accounts receivable, inventory and certain equipment and intellectual property, to Inovo (Ann Arbor, Michigan), for $5.25 million in cash. The purchase price is subject to adjustment based on changes in working capital between the signing date and the closing of the sale, provided that in no event will the selling price exceed $5.5 million. Based on the current selling price, the company would not incur a loss on the sale of these assets, CHAD said. Inovo will assume certain liabilities and obligations related to CHAD's oxygen conserver business while CHAD retains the assets related to its TOTALO2 system and in-home oxygen transfilling business as well as products in development for the sleep disorder market. The agreement is subject to certain closing conditions, including approval of CHAD's shareholders. George Harris, president/CEO of Inovo, said, "Our strategy is to continue CHAD'S tradition as the market leader in electronic and pneumatic conservers." Early Yager, president/CEO of CHAD, said, "If the asset sale is approved by CHAD's shareholders, the company's future efforts will focus on the sleep disorder market, and we will seek to realize appropriate value for the sleep business and the TOTALO2 system and transfilling assets." He added: "Uncertainty regarding Medicare reimbursement has contributed to operating losses at CHAD in recent quarters and clouded the outlook for the near term future of the Company's oxygen therapy business." He said that the decision to sell was based on its decision to focus on "the many attractive growth opportunities we see in the multi-billion dollar sleep disorder market." He said the company hopes to receive 510(k) clearance for its initial sleep device "early next year, and to submit 510k applications for two additional devices in 2008." Yager said that the sale would result in a significant reduction in CHAD's operating expenses. "INOVO plans to operate in CHAD's facility during a transition period which would end no later than June 2008. During the transition period, INOVO will reimburse us for the costs of our employees who perform transition-related services, as well as rent and other facilities charges." Following the sale of its oxygen conserver business, payment of outstanding debt and payment of severance obligations related to the sale, CHAD said it anticipates that its remaining assets would include net operating loss carry-forwards, the assets related to its in-home transfilling business and the patented sleep technology the company has been developing for the past three years. For the three months ended Sept. 30, 2007, net sales for CHAD decreased to $3,206,000 compared to $4,983,000 for 2Q of FY07. The net loss for this year's second quarter was $1,353,000, or 13 cents a basic and diluted share, compared to a net loss for last year's second quarter of $371,000, or 3 cents a basic and diluted share. The company said that recent operating trends have required it to seek outside financing. The company said that its cash flow for the six months ended Sept. 30, 2007, was negative and that it is currently dependent upon financing under its line of credit to fund daily operations. "Continued availability of funding under this line of credit will depend upon a number of factors," it said in a statement, "including the amount of eligible assets owned ... . While the sale of the oxygen conserver assets ... address the company's near-term liquidity requirements [but that the sale] is not likely to close for several months. As a result, liquidity for the next several months will continue to be dependent upon borrowings ...." Inovo manufactures oxygen flow control products which are private-labeled for distributors and manufacturers in the home respiratory, hospital, and emergency medical markets.