A Medical Device Daily
HEI, (Minneapolis) reported that it has closed on the sale of substantially all of the assets of its RFID division to Smartrac Technology US (Chanhassen, Minnesota), a wholly-owned subsidiary of Smartrac (Amsterdam, the Netherlands) for $3 million.
The transaction was structured as a sale of substantially all the assets of the RFID division, including inventory, receivables, customer contracts, customer lists, and the assumption of substantially all of the liabilities. The purchase price was $3 million cash and closing was effective 11:59 pm Aug. 31, 2007.
HEI expects to recognize a gain from the sale of assets in its 4th quarter ended September 1, 2007 of about $1.5 million, prior to any employee obligations, severance, and other transaction-related costs. HEI has used the sale proceeds to pay down existing debt obligations.
RIFD technology is used in a variety of industries, from medical to agriculture to warehousing. The technology often includes tiny chips that emit radio signals so that products can be tracked or identified.
In Tuesday’s Medical Device Daily in which the deal was first disclosed, HEI CEO Mark Thomas said that the RFID business, which did about $3.5 million in annual revenue, had always been relatively independent of HEI and as such was easy to “carve out” for a sale (Medical Device Daily, Sept. 4, 2007). Smartrac, he said, had been looking to establish a stronger presence in the U.S.
HEI develops microelectronics, subsystems, systems, connectivity and software solutions for OEMs engaged for the medical equipment and medical device, hearing, communications, and industrial markets.
Aradigm (Hayward, California) reported it entered into an exclusive development agreement with Lung Rx (Silver Spring, Maryland), a wholly-owned subsidiary of United Therapeutics (Silver Spring) for inhaled treprostinil using Aradigm’s AERx Essence technology for the treatment of pulmonary arterial hypertension (PAH) and other potential therapeutic indications.
AERx Essence inhalation delivery system is a palm-size, inhalation device that is expected to deliver medication to the patient in two to four breaths.
Aradigm will receive an upfront fee of $440,000 from Lung Rx, followed by an additional $440,000 four months after the signing date. Aradigm will initiate, and is responsible for conducting and funding, a study that includes a bridging clinical trial comparing the AERx Essence technology to the nebulizer used in an ongoing TRIUMPH (TReprostinil Sodium Inhalation Used in the Management of Pulmonary Arterial Hypertension) Phase 3 registration trial, a study of inhaled treprostinil in patients with severe PAH being conducted at approximately 42 centers in the U.S. and Europe. Aradigm expects the bridging clinical trial will be completed in 2008.
Following completion of the bridging study, Aradigm will receive from Lung Rx certain milestones and license fees. These fees are expected to be paid within three years of signing the agreement and total up to $9.65 million. In addition, Lung Rx will purchase $3.47 million of Aradigm’s common stock at the average closing price for the thirty day period prior to specified events. Following successful completion of the bridging study Lung Rx will also pay for the remaining development costs to commercialize and be responsible for manufacturing inhaled treprostinil with AERx Essence technology.
Following commercialization of the product, the agreement specifies that Aradigm will receive royalties from Lung Rx on a tiered basis of up to 10% of net sales of treprostinil with AERx Essence technology. (Editor’s note: See Agreements, p. 6, for news of another Aradigm deal.)
In other dealmaking activity:
• Innocoll (Ashburn, Virginia) has agreed to the sale of its CollaRx gentamicin surgical implant and European sales and marketing infrastructure to EUSA Pharma (Doylestown, Pennsylvania), a transatlantic specialty pharmaceutical company focused on oncology, pain control and critical care.
The transaction provides EUSA with rights to Innocoll’s gentamicin surgical implant, a biodegradable leave-behind surgical implant for the treatment and prevention of surgical site infections, for all worldwide markets except the U.S.
Similar rights to Innocoll’s two late stage development products, CollaRx gentamicin topical for the treatment and prevention of diabetic foot infections and CollaRx Bupivacaine implant for the management of post-operative pain, were included as part of the transaction, together with an option to the U.S. rights for the Bupivacine implant.
Innocoll will transfer to EUSA its pan-European sales and marketing infrastructure, which has a presence in more than 20 European territories, as well as its distribution network covering more than 25 further countries around the world. Innocoll will continue to manufacture and supply the products to EUSA and will progress the development of the late-stage clinical programs.
In return, EUSA will make an upfront payment, pay development, regulatory and sales performance milestone fees and make an equity investment in Innocoll’s parent company.
The implant is a biodegradable leave-behind implant impregnated with the broad spectrum aminoglycoside antibiotic, gentamicin. It was developed using Innocoll’s collagen-based technology, CollaRx, and is indicated as an adjunct to systemic antibiotic therapy for the treatment and prevention of post-surgical acquired infection in both hard and soft tissues.
• Skilled Healthcare Group (Foot Hill Ranch, California) reported that it has completed the acquisition of 10 skilled nursing facilities located primarily in and around Albuquerque, New Mexico. The acquisition, effective Sept. 1, includes facilities comprised of 1,180 beds collectively, along with a hospice company. The company previously reported that it had signed definitive agreements to purchase the operations for about $51.5 million in the aggregate. The company expects the acquisition to be modestly accretive to earnings per share for the remainder of 2007.
The selling companies are affiliated with Laurel Healthcare Providers ( Albuquerque,) and each facility will operate as a distinct subsidiary business. In 2006, selling companies collectively generated adjusted revenues of about $75.2 million.
Skilled Healthcare subsidiaries operate skilled nursing and assisted living facilities as well as a rehabilitation therapy and a hospice business.