A Medical Device Daily

Iomed (Salt Lake City) and ReAble Therapeutics (formerly Encore Medical; Austin, Texas) reported an agreement for ReAble to acquire all the outstanding shares of IOMED in an all-cash merger for $2.75 a share, subject to adjustment. The total transaction consideration will be about $22 million, representing a premium of about 38% over the average closing price over the last 30 trading days.

Iomed is a manufacturer of drug-delivery devices used primarily for pain management. ReAble is a private medical device company in the rehabilitation and orthopedics markets.

Iomed will be a wholly-owned subsidiary of ReAble, operating under ReAble's Empi division.

Empi is a manufacturer and marketer of pain management and rehabilitation devices. As part of the Empi division, Iomed is expected to continue its manufacturing, customer support and product development functions at its Salt Lake City facility. In addition, Iomed will maintain its field-sales support and continue to distribute its core iontophoresis product lines through its existing network of independent sales agents and distributors.

The acquisition, which has been unanimously approved by Iomeds board, is subject to various closing conditions, including the approval of Iomedshareholders.

Kenneth Davidson, ReAble's CEO, said, "Iomed has developed an outstanding line of innovative drug delivery devices and technologies, and has built an excellent third-party distribution network. We view Iomed's products and extensive distribution network as important strategic assets… this acquisition represents an important step forward in ReAble's overall growth strategy."

Robert Lollini, Iomed's CEO, said, "EWe are very pleased to join together with Empi … and to know that our core capabilities, our products and our technologies will continue to be utilized effectively and commercialized broadly."

The transaction is expected to close in July.

Seven Hills Partners acted as exclusive financial advisor to Iomed in this transaction.

ReAble manufactures medical devices used by physicians, therapists, athletic trainers, orthopedic surgeons, and other healthcare professionals to treat patients with musculoskeletal conditions. Through its Orthopedic Rehabilitation Division, it distributes electrical stimulation and other orthopedic products used for pain management, orthopedic rehabilitation, physical therapy, fitness and sport performance enhancement. ReAble's Surgical Implant Division reconstructive joint products.

ReAble was acquired by The Blackstone Group, a private equity firm, in a go-private transaction in November 2006.

IOMED is a developer of iontophoresis, a technology that delivers pharmaceuticals transdermally using electric current to ionize drug molecules and propel them through the skin.

In other dealmaking activity:

• Ogenix (Beachwood, Ohio) reported that it will grant an option to license its Transdermal Sustained Oxygen Therapy (TSOT) technology for wound healing and the treatment of skin disorders to Minerva Healthcare (San Francisco) for worldwide distribution, except in Canada, of its EpiFLO family of products.

Ogenix will receive an upfront license fee for its products, the amount undisclosed, plus ongoing royalties on sales of current and future oxygen therapy products.

Ownership of Ogenix will remain unchanged.

EpiFLO, the delivery mechanism for TSOT, is a method of administering concentrated oxygen in what the company calls a "patient-friendly" wound therapy delivery system. During application, the patient can continue with normal activities while being treated 24 hours per day.

The technology is FDA-cleared to treat certain hard-to-heal wound conditions associated with diabetes, venous stasis, post-surgical infections, amputations, bedsores, burns and skin grafts.

Minerva will serve as the commercialization arm of the Ogenix TSOT product line for wound healing and the treatment of skin disorders. Ogenix will serve as a product development source for Minerva that will focus on the commercialization of topical products and medical devices to treat various dermatological conditions and wounds. Ogenix will continue to develop and manage new products through the FDA clearance process and Minerva will manage clinical trials and commercialization.