A Medical Device Daily
Nanogen (San Diego) reported that it is evaluating strategic alternatives for its microarray business as part of an aggressive plan to achieve profitability. The microarray business includes the company’s NanoChip instrument system and related multiplexed reagents and consumables. The company said it has retained Credit Suisse to assist in the evaluation of alternatives which may include a sale, partnering or closure of the array business. The company expects to complete its evaluation of strategic alternatives within sixty to ninety days.
The goal of the strategic evaluation, the company said, is to create a restructured business at Nanogen that can reach profitability faster and with greater predictability. The restructured business will continue to focus on clinical diagnostic markets with emphasis on real-time molecular and rapid point of care products. The company said it has a strong intellectual property and technology base in both of these areas and that its products are widely adopted and well accepted by customers.
“Financial expectations for the restructured business have not been completed and are dependent on the outcome of the strategic evaluation,” said Robert Saltmarsh, Nanogen’s CFO. “While specific goals will be discussed after the conclusion of our evaluation process, we expect that sale or closure of the microarray business will decrease expenses and improve cash flow by at least $15 million annually. We also expect the restructured business will show revenue growth on a year over year basis.”
“In taking this course of action, we recognize that our microarray technology is very good and customer reception is positive. However, multiplex molecular testing remains an early stage market with slower growth and lower testing volumes than we expected,” said Howard Birndorf, Nanogen’s chairman and CEO. “The cost and effort to develop the broad product menu needed to be successful while also working to develop the clinical market over the next several years are large efforts and are expenses that Nanogen can no longer afford on its own.”
“In the past year, we have begun to build a solid business with our real-time PCR products and Point of Care rapid testing solutions. By focusing on these businesses, we expect to significantly grow our presence in the diagnostics market and improve our business performance,” said David Ludvigson, Nanogen’s president /COO. “We hold significant intellectual property in the molecular and point of care areas and intend to continue developing proprietary, technology based products that add value in the clinical diagnostic market and are well accepted by customers.”
Nanogen’s products include real-time PCR reagents, the NanoChip400 electronic microarray platform and a line of rapid, point-of-care diagnostic tests.
In other dealmaking news:
• Cantel Medical (Little Falls, New Jersey) reported that it has expanded its Medivators Endoscope Reprocessing product line by purchasing the assets of Verimetrix (St. Louis), which makes the Veriscan Pro V2.2 system, an endoscope leak and fluid detection device. Terms of the deal were not disclosed.
The business being acquired has pre-acquisition annual revenues of about $2 million and is expected to be accretive in FY08.
Roy Malkin, president/CEO of the Minntech’s (Minneapolis) Medivators business group said: “The Veriscan Pro V2.2 is the ideal complement to our national direct sales strategy, equipping our sales team with a sequential customer solution ranging from pre-cleaning flushing aids and leak testing, through to automated disinfection equipment and chemistries.”
Minntech is a subsidiary of Cantel
• Eye care company Alcon (Huenenberg, Switzerland) reported that the company now holds more than 70% of WaveLight’s(Erlangen, Germany) outstanding shares through purchase, contractual commitment or tender. Additionally, Alcon’s takeover of WaveLight was recently approved by the German Federal Cartel Authority.
Alcon recently amended its acquisition offer by removing the minimum acceptance threshold and extending the tender offer period through Sept. 25. Its offer remains at €15 per WaveLight share which represents a 100% premium on the one-month (€7.49), and a 118% premium on the three-month (€6.88), volume weighted average stock exchange price as of the publication of the decision to launch the tender offer on July 16 (Medical Device Daily, July 17, 2007).
WaveLight’s products include the Allegretto laser system for refractive eye surgery.
• Siemens (Munich, Germany) reported that the U.S. antitrust waiting period for its $7 billion cash tender offer for all of the issued and outstanding shares of common stock of Dade Behring (Deerfield, Illinois) has been terminated.
The company initiated a tender offer on Aug. 8 for all of the outstanding shares of common stock of Dade Behring for $77 per share, net to the seller in cash. On Sept. 5, the tender offer was extended to midnight, EST, on Sept. 26, 2007.
Siemens has submitted a draft of the required merger control filing with the European Commission and has since been in discussions with the authority. The company said it believes that it is possible that it might obtain competition law clearance, and therefore be able to close the transaction, during calendar 2007, earlier than the projected time frame of the second quarter of FY08, which it disclosed when the merger was first announced (MDD, July 26, 2007).
Once the merger is closed, Dade will become a unit of the Siemens Medical Solutions (SMS; Malvern, Pennsylvania) business.