A Diagnostics & Imaging Week

Zila (Phoenix) has completed the acquisition of Professional Dental Technologies (Pro-Dentec; Batesville, Arkansas), a privately held dental products company, in a $34 million cash transaction.

"With the acquisition of Pro-Dentec, we have completed a remarkable transformation of Zila into a cancer detection company. Pro-Dentec provides us the means to distribute our oral cancer detection products directly to dental professionals through a highly-regarded national sales force that is already profitably selling complementary Soft Tissue Management products," said Douglas Burkett, PhD, chairman, CEO and president of Zila.

To facilitate the acquisition of Pro-Dentec, the company completed two tranches of a $40 million private placement of equity and debt through its financial advisor and placement agent, Roth Capital Partners, with the final $16 million tranche for future working capital scheduled to fund last week.

Zila is a diagnostic company initially focused on oral cancer.

In other dealmaking news:

Magellan Biosciences (Chelmsford, Massachusetts), a developer of clinical diagnostic products, said it has acquired TREK Diagnostic Systems (Cleveland), a provider of clinical-diagnostic products for infectious diseases. Terms of the acquisition were not disclosed.

TREK will operate as a wholly owned subsidiary of Magellan and continue to serve customers under the TREK Diagnostic Systems brand name. The existing management team and the company's roughly 150 U.S. and UK-based employees are expected to remain with the company.

According to Robert Rosenthal, president/CEO of Magellan, the TREK acquisition significantly expands Magellan's commercial presence in clinical diagnostics. "Importantly, this transaction accelerates our strategy to become a leading diagnostics company focused on products for hospital-based labs and near-patient testing.

TREK's signature product lines, the VersaTREK automated microbial detection system and the Sensititre automated susceptibility and identification testing system, are designed to provide cost-effective improvements in workflow efficiencies, ergonomics, and test-result performance.

Micrus Endovascular (San Jose, California) reported that it has acquired certain assets and business of privately held VasCon (Doral, Florida), a maker of vascular access and delivery devices.

Micrus Design Technology, the subsidiary of Micrus formed to acquire the assets, will develop and manufacture neurovascular catheter products for Micrus, including Micrus' steerable catheter, the Enzo. VasCon's existing cardiovascular products will continue to be sold through non-Micrus distribution channels.

Micrus, through its subsidiary, acquired assets of VasCon for an up-front payment of about $5 million, paid in cash and Micrus stock, and performance-based earn-out payments over three years.

Certain VasCon personnel have become employees of Micrus Design Technology. Mitch Auran, formerly VasCon's president and CFO, has been appointed vice president of the newly formed Micrus subsidiary.

Founded in 2000, VasCon has made diagnostic catheters, guiding catheters, PTCA catheters, catheter sheath introducers, neurological stimulators, hydrophilic coating and stent deployment systems under private label, as well as for a list of blue chip medical device customers.

In other dealmaking news:

• PerkinElmer (Wellesley, Massachusetts) has signed a definitive agreement to acquire Evotec Technologies (Hamburg, Germany) in a cash transaction valued at about EUR 23 million ($30.64 million).

Evotec Technologies is a majority owned subsidiary of Evotec AG, which provides systems for confocal imaging, cell handling, ultra-high throughput screening (uHTS) as well as image capture and cellular analysis software. The transaction is expected to occur in late December 2006 or early 2007.

"Together with the sale of certain technology assets of Evotec Technologies to Olympus [Tokyo] earlier in the year, the combined divestments value Evotec Technologies at approximately EUR 30 million. The cash proceeds will provide us with additional flexibility to progress and expand our Central Nervous System pipeline," said Joern Aldag, CEO of Evotec.

Evotec Technologies' high-performance HCS instruments and image analysis software help pharmaceutical, biotechnology and academic researchers automate cell screening and analysis for drug discovery. Included in the company's portfolio is the Opera HCS platform, a premier tool for high content analysis that combines the precision of confocal microscopy with the throughput required for primary and secondary screening.

Biomoda (Albuquerque, New Mexico), a developer of early lung cancer detection testing and other cancer diagnostics, said it has signed an agreement to exclusively license cancer detection technology from Los Alamos National Laboratory. Financial terms were not disclosed.

"Our agreement highlights the importance of our National Laboratories, particularly Los Alamos, and the significant contribution made by them to medical research and product development," said John Cousins, president of Biomoda. "It was a researcher from Los Alamos who 15 years ago began his investigation into the lung ailments of miners in Colorado that led to Biomoda's technology that detects lung cancer at its earliest stages."

Biomoda's technology is based on a porphyrin application that preferentially binds to cancerous or aberrant cells, which are non-invasively collected from lung sputum samples. The porphyrin then glows red under fluorescent light, easily identifying cancerous cells. This optical reading of a molecular cancer test is automated, permitting rapid, accurate, and inexpensive cancer screening of large populations.

• Affymetrix (Santa Clara, California) and Baylor College of Medicine (Houston) reported that Baylor has obtained a non-exclusive, worldwide license to a number of Affymetrix patents covering comparative genomic hybridization microarray services in Clinical Laboratory Improvement Amendments environments.

Financial details of the license were not disclosed.

• Neuroptix (Acton, Massachusetts) and Merck (Whitehouse, New Jersey) reported that they have established a research collaboration in which Merck will evaluate Neuroptix's diagnostic technology in preclinical models of Alzheimer's disease and clinical trial monitoring of potential new Alzheimer's drugs.

Neuroptix will receive an up-front payment — the amount undisclosed — annual technology access fees and payments based on milestones. Neuroptix will also receive payments for instruments, diagnostic agents and services. Merck receives a non-exclusive license to use Neuroptix's technology for preclinical and clinical research purposes.

Neuroptix will provide Merck with access to its Neuroptix QEL laser eye scanning device, which in preclinical studies in mice has detected Alzheimer's-related amyloid protein aggregates in the lens of the eye. The amyloid protein aggregates are a surrogate biomarker of beta amyloid in the brain.

"We are hopeful that the activities under the agreement will demonstrate the potential of this novel, non-invasive technology for measuring beta amyloid, a biomarker of Alzheimer's disease," said Merv Turner, PhD, senior vice president of Worldwide Licensing and External Research at Merck.

"Merck is a leader in the development of novel treatments for unmet medical needs, which makes it an ideal partner to help create predictive diagnostic protocols that fully explore the potential of Neuroptix's technology," said Paul Hartung, president/CEO of Neuroptix."

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