A Medical Device Daily

NxStage Medical (Lawrence, Massachusetts), the manufacturer of the NxStage System One portable kidney dialysis machine, reported that U.S. antitrust authorities have completed their review of the company’s proposed $78.7 million acquisition of Medisystems (Seattle) and certain affiliated entities. The company said it expects to close the transaction in 4Q07.

The deal to acquire Medisystems, a private developer of medical devices for use in dialysis and blood-related treatments, was first disclosed in June (Medical Device Daily, June 6, 2007).

Mediasystems is a U.S. market leader in hemodialysis blood tubing sets, A.V. fistula needles, and other ancillary hemodialysis disposables.

In anticipation of the closing, NxStage said it is starting to implement key organizational changes intended to allow the company to better resource capabilities that are critical to the growth of the business. Effective immediately, Michael Webb has been promoted to the newly created role of senior VP of Quality, Regulatory and Clinical Affairs.

Prior to his promotion, Webb served at the VP level in several different roles at NxStage, including disposables manufacturing, operations and quality assurance, regulatory and clinical affairs.

Additionally, the company reported that upon the close of the Medisystems acquisition, Phil Licari will resign as senior VP and COO to pursue other opportunities.

In addition to the Quality, Regulatory and Clinical Affairs responsibilities which are being assumed by Webb, the majority of Licari’s other responsibilities as COO are expected to be taken on by the Medisystems’ executive team at the closing of the Medisystems acquisition.

David Utterberg, Medisystems’ president/CEO, owns directly or indirectly all of the outstanding shares of Medisystems and is a member of NxStage’s board of directors. Utterberg currently owns about 7% of NxStage common stock and his total ownership would be about 23% of NxStage common stock as a result of this transaction. He will serve in a consulting capacity to the company for a two year period and will remain a NxStage director.

In other dealmaking news: Entelos (Foster City, California), a life sciences company that leverages its in silico disease models, known as PhysioLab platforms, to develop drugs and support pharmaceutical R&D, reported that it has entered into an agreement to acquire Iconix Biosciences (Mountain View, California), a privately held predictive toxicology company in an all-share transaction. The acquisition was expected to close today.

The initial consideration for the acquisition is to be satisfied by the issue of up to 12,776,658 Entelos shares (to be adjusted for net working capital) and a potential maximum earn out payment of $25 million if certain financial milestones are achieved. Such deferred consideration is to be also satisfied in Entelos shares, which will be based on a 10-day average closing price for the period prior to an earn out payment.

Initial consideration of up to $14.1 million will be satisfied by the issue of up to 12,776,658 Entelos shares based upon an Entelos share price of 55 pence. The closing price on Aug. 29, being the latest practicable date prior to this disclosure, was 32.5 pence and based on this closing price, the initial consideration for Iconix is valued at up to $8.3 million.

“We believe the combination of our predictive efficacy models with Iconix’s toxicology expertise can create a new paradigm for discovering and developing drugs,” said James Karis, president/CEO of Entelos. “Drug failures are often due to efficacy or toxicity issues, and while Entelos’ predictive disease models address efficacy, Iconix’s toxicology databases help to address toxicities.”

Iconix’s DrugMatrix system has been installed at the FDA for use by the Center for Drug Evaluation and Research (CDER) to evaluate voluntarily genomic data submissions. In addition, Iconix is a member of the predictive safety testing consortium, which is developing data and processes to support the regulatory use of new safety biomarkers.

This acquisition of Iconix, as well as Entelos’ collaboration with the FDA to develop a predictive model of drug-induced human liver injury, expands the combined companies’ reach into safety assessment, it said.

Iconix’s technology will also add significant new capabilities for translational medicine and for finding new uses for existing drugs and drug combinations, Entelos said.

Iconix will become part of Entelos’ Technology and Services division. As a consequence of the acquisition, Entelos said it anticipates consolidating certain administrative and operational positions at Iconix to Entelos’ headquarters in Foster City, California.