A Diagnostics & Imaging Week

Biotechnology giant Genzyme (Cambridge, Massachusetts) reported that it plans to acquire the diagnostics division of privately held Diagnostic Chemicals (Charlottetown, Prince Edward Island) for about $56.5 million.

Diagnostic Chemicals’ portfolio includes more than 50 clinical chemistry reagents and the provision of diagnostics operations in Prince Edward Island, Canada and Connecticut, according to a filing with the U.S. Securities and Exchange Commission.

The diagnostics business generated $21 million in revenue for FY07, which closed Aug. 31, according to officials. Diagnostic Chemicals will become a part of Genzyme’s diagnostics business unit.

The deal, which was struck Nov. 2, is expected to close in December. The transaction does not include Prince Edward Island-based Diagnostic Chemicals’ biopharmaceutical assets, the companies reported.

In other dealmaking activity:

• Israeli camera-in-a-pill maker Given Imaging (Jerusalem) said that InScope, a business of Johnson & Johnson (New Brunswick, New Jersey) has ended its agreement to market Given’s PillCam in the U.S. The device is used to diagnose gastrointestinal disorders.

InScope, a division of Ethicon Endo-Surgery (Cincinnati, Ohio), will pay Given $7.6 million in fees associated with the termination, the device maker said in a statement.

As a result, Given said it will record income of about $13.5 million in 4Q07 and additional income of roughly $12.5 million during the first two quarters of 2008.

Ethicon cited a shift in its strategic priorities within gastroenterology and other areas as the reason for ending the relationship.

InScope said it will continue to support reimbursement activities for the PillCam and maintain its market development field force for up to six months. It also agreed to continue to fund ongoing clinical trials associated with esophageal diseases.

• MedQuest (Alpharetta, Georgia), a national provider of diagnostic imaging services, has officially merged with Novant Health (Winston-Salem, North Carolina) and will operate as a subsidiary of Novant.

Novant, which first disclosed the merger plans in August, purchased MedQuest for $45 million, and immediately after the purchase MedQuest will continue to have about $369 million of debt outstanding.

If MedQuest achieves agreed upon financial metrics during 2008, Novant will pay up to an additional $35 million.

MedQuest’s existing management team, which will participate in a portion of the compensation being paid to existing stockholders in the transaction (including the contingent portion), continues to lead the company and there will be no immediate changes for MedQuest employees or customers, the companies said.

Novant is a not-for-profit integrated healthcare system serving North Carolina and South Carolina. It consists of an 800-physician medical group and eight hospitals.

MedQuest is a for-profit diagnostic imaging company that owns and operates 92 outpatient centers in 13 states. MedQuest centers offer diagnostic imaging services, such as MRI, CT, nuclear medicine, ultrasound, mammography, bone densitometry, fluoroscopy and X-ray.

• Prescient Medical (Doylestown, Pennsylvania) said it has acquired a new technology designed to identify and quantify metabolic activity and inflammation in human artery tissue by measuring the time it takes for light to dissipate after the tissue has been excited with ultra-short light pulses. Terms were not disclosed.

The technique, called Time Resolved Light Induced Fluroescence Spectroscopy (TR-LIFS), exploits the phenomenon that bi-products of metabolic activity behave differently than surrounding tissue. In TR-LIFS, a short light pulse (picoseconds) is used to excite the tissue, and then the resulting light that emanates from the tissue is monitored over a brief time span (several nanoseconds). According to the company, the technology accurately detects inflammation in human tissue in vitro and in vivo.

• Roche Holdings (Basel, Switzerland) said it has signed licensing and settlement agreements with Ortho-Clinical Diagnostic (Raritan, New Jersey) and Novartis Vaccines & Diagnostics (Basel, Switzerland) in the field of Hepatitis C virus diagnostics. Financial terms of were not disclosed.

Ortho and Novartis have granted Roche Diagnostics (Indianapolis, Indiana) a worldwide royalty-bearing license under its portfolio for Hepatitis C virus in the field of immuno-diagnostics. The agreement also includes cross licensing of patents owned by Roche, the companies said.

Roche, Ortho and Novartis also agreed to settle all litigation related to the licensed patents.

Ortho is a business of Johnson & Johnson (New Brunswick, New Jersey).

• SpectraScience (San Diego) reported that it has acquired all shares of Luma Imaging (Lexington, Massachusetts). Financial terms were not disclosed.

Luma has FDA approval for a non-invasive optical Cervical Imaging System designed as an adjunct to colposcopy. According to the company, the device can more effectively detect cervical cancer precursors than using conventional means alone.

Luma’s system requires a single-use disposable probe and little additional training because it uses clinicians’ existing skill sets, the company said.

Clinical trials comprised of more than 3,000 women demonstrated the system’s ability to detect over 25% more atypical squamous cells of undetermined significance and low-grade squamous intraepithelial lesion (ASCUS/LSIL) cancer cell precursors than colposcopy alone, Luma said. These findings often show up as mild abnormalities on Pap tests, it said.

SpectraScience said the acquisition was accounted for as an exchange of the shares of both companies and includes the inventory and the worldwide application for 51 patents, 28 issued, a notice of allowance from the U.S. Patent and Trademark Office on two additional applications and 21 patents pending.

SpectraScience has developed a WavSTAT Optical Biopsy System used by physicians to diagnose tissue to determine if it is normal, pre-cancerous, or cancerous “within seconds.” The WavSTAT is FDA-approved for detecting pre-cancer and cancer in the colon.

A new application for detecting pre-cancers in the throat, called Barrett’s esophagus, is being tested in a clinical trial, the company said. Cancer of the esophagus is more than 90% fatal and may develop as a result of chronic gatroesophageal reflux disease, according to SpectraScience.

“This acquisition gives us two FDA-approved devices for the early detection of colon and cervical cancers,” said Jim Hitchin, CEO of SpectraScience. “Completion of our Barrett’s esophagus trial and FDA approval will give us yet another early cancer detection application. We hope to launch the other applications, such as early detection of lung cancer, using our optical technology in the near future.”

• VWR International (West Chester, Pennsylvania), a supplier to the global research lab industry, reported acquiring Omnilabo International (Breda, the Netherlands), a laboratory supply distributor. Omnilabo has 42 employees in Netherlands and Belgium.

Omnilabo was founded in 1979 in the Netherlands and since 2003 has been owned by Nimbus, a Dutch private equity firm. The business has been engaged throughout its history in the distribution of laboratory and clinical consumables, life science reagents and chromatography products.

VWR offers products from a wide range of manufacturers, to a large number of customers in North America, Europe and other locations.

• Agilent Technologies (Santa Clara, California) and Velocity11 reported a definitive agreement for Agilent to acquire Velocity11.

Financial terms were not disclosed.

Agilent and Velocity11 expect to finalize the deal within 30 to 60 days.

Velocity11 makes robotic solutions that range from standalone instrumentation to bench-top automation solutions to large, multi-armed robotic systems. Agilent offers automated sample-preparation solutions across a broad range of applications.