Medical Device Daily

Allergan (Irvine, California) reported completing its acquisition of Swiss medical technology developer EndoArt (Lausanne, Switzerland), a developer of telemetrically-controlled implants used in the treatment of morbid obesity and other conditions, for $97 million in cash.

Allergan said the acquisition builds on the strength of its obesity intervention product portfolio, which includes the Lap-Band adjustable gastric banding system, currently the only adjustable implant device for individualized weight loss approved in the U.S.; and the BioEnterics Intragastric Balloon, a non-surgical alternative for the treatment of obesity approved in many countries although not currently available in the U.S.

Allergan acquires ownership of EndoArt's technology platform, including FloWatch technology, which powers the Easyband remote adjustable gastric band system, a next-generation, telemetrically-adjustable gastric banding device for the treatment of morbid obesity.

The Easyband device is surgically implanted around the upper stomach and can be adjusted when necessary according to each patient's individual weight loss needs and results using a simple external control unit placed over the device. The control unit transmits power and commands to, and receives information from, an implanted antenna connected to the Easyband, which can then be adjusted precisely and in just minutes.

David Pyott, Allergan's CEO and chairman, said that the acquired technology "has exciting potential across a broad range of other medical device applications and disease categories, such as urology and gastroenterology."

EndoArt also markets another product, the Flowatch-PAB, in Europe for pulmonary artery banding in newborn infants, and has been selling the FloWatch-PAB device in Europe since 2003 for newborn babies with severe heart malformations.

According to Caroline Van Hove, VP of marketing for Allergan, the company is trying to evaluate some of the other acquired technology, such as the FloWatch-PAB, that does not really fit into Allergan's own product mix and will decide what to do with it.

"We're currently evaluating all this [new technology] and trying to assess where it fits into our portfolio," she told Medical Device Daily, adding that products or product applications that don't logically fit, could be licensed or sold.

The Easyband was approved by the European Commission in mid-2006. Allergan anticipates seeking FDA approval of the device following completion of clinical studies conducted in the U.S.

While Van Hove noted that the Easyband is the "next-generation" device of the company's own Lap Band system — currently considered by many to be the minimally-invasive gold standard product for obesity intervention — she declined to speculate on whether or not the Easyband would erode Lap Band sales.

Van Hove noted that the device is still not cleared for sale in the U.S. and so talk of it replacing the Lap Band is still premature. She said the Easyband's investigational device exemption is currently under review in the U.S., and that hurdle must be cleared as well as getting a premarket approval application through the FDA before any other talk about its impact on the Lap Band can be entertained.

She characterized the acquisition as a "strategic buy" that could bring big dividends in the future.

Allergan also said it is establishing EndoArt's facility in Lausanne, Switzerland, as an international center of excellence for research and development in obesity-related disorders.

The company said it anticipated that a substantial portion of the acquisition purchase price will be expensed as in-process research and development, with the balance of the purchase price being allocated to other identifiable tangible and intangible assets acquired, including developed and core technologies, liabilities assumed and goodwill.

It said it will not alter financial guidance for 2007 as a result of the transaction.

In other dealmaking news:

• Pluristem Life Systems (Haifa, Israel) reported a licensing agreement and stock swap with Stem Cell Innovations (SCI; Scotch Plains, New Jersey) for marketing rights of Pluristem's PLX I product in Asia, excluding Japan and 3-D stem cell expansion capability.

The licensing agreement provides Stem Cell with certain rights to Pluristem's PLX I product and 3-D stem cell expansion capability, in exchange for an upfront fee of 23 million shares of Stem Cell's common stock, milestone payments and royalties.

Stem Cell will exchange 27 million shares of SCI's common stock for 66 million shares of Pluristem common stock and five-year warrants to purchase 66 million shares of Pluristem common stock at 3 cents a share.

Pluristem is a life sciences company developing what it calls "non-personalized" stem cell expansion technology products to treat a variety of disorders.

SCI develops human pluripotent stem cells, known as PluriCells, with potential to aid in drug discovery, toxicology, and cell therapy.

• SensiGen (Ann Arbor, Michigan), a biotech company developing gene-based molecular diagnostics, said it has exercised its option to exclusively license an ultra-sensitive human papillomavirus (HPV) detection test developed at the University of Michigan (Ann Arbor).

The technology, called the AttoSens HPV Test, was developed in the laboratory of David Kurnit, MD, PhD, professor of pediatrics and communicable diseases at the University of Michigan Medical Center. "With this technology we have demonstrated the ability not only to detect as little as one to three copies of HPV DNA in any blood or tissue sample, but also to clearly identify in a single assay each of the 15 unique genotypes of HPV that cause cervical cancer in women," said Kurnit. "Clinically, our research has shown that this assay can virtually eliminate errors, in terms of false negative or false positive results, commonly associated with current testing methods."

• Ventas (Louisville, Kentucky) said it filed an application in the Ontario Superior Court of Justice demanding that Sunrise Senior Living Real Estate Investment Trust (Toronto) comply with its covenants in its purchase agreement with Ventas and take all appropriate steps to enforce Sunrise's rights under its confidentiality and standstill agreement with Health Care Property Investors (HCP; Long Beach, California). Ventas also informed HCP that it intends to avail itself of all of its rights in respect of HCP's breaches of its confidentiality and standstill agreement.

HCP proposed to buy Sunrise in a transaction that valued each Sunrise unit at C$18 ($15.45). It said its offer represented a 20% premium over the C$15-per-unit price on offer in Sunrise's proposed sale to Ventas, proposed on Jan. 15. HCP said its offer values the equity of Sunrise at C$1.4 billion.

In January, Ventas agreed to buy Sunrise Senior Living for about $1.8 billion in cash and debt. Ventas noted that its acquisition of Sunrise was the result of an extensive auction process conducted by the Sunrise independent trustees.

At the conclusion of Sunrise's process, Ventas noted that HCP withdrew from the process and declined to submit a final binding proposal "apparently because it was unable to reach the necessary agreements with the various parties. "

Ventas is a healthcare real estate investment trust.