A Medical Device Daily

RadNet Management (Los Angeles) was provided a $405 million senior secured security by GE Healthcare Financial Services to finance the acquisition of Radiologix (Dallas).

The acquisition, first disclosed in July (Medical Device Daily, July 10, 2006), creates the largest owner and operator of fixed diagnostic imaging centers in the U.S.

The financing, which consists of $270 million in first lien facilities and a $135 million second lien loan, funded a portion of the cash purchase of Radiologix, refinanced existing debt and provides liquidity for working capital and other general corporate purposes.

RadNet, a GE customer for more than two decades, most recently tapped GE in March 2006 for a $161 million recapitalization of the company. That strategic transaction helped set the stage for the Radiologix acquisition it said.

The acquisition of Radiologix, a national provider of imaging services, allows the company to expand its presence in California, and gives the company a concentrated platform outside of California that it plans to optimize and grow. RadNet will use the acquisition to further its strategies of geographic clustering, exclusive capitation contracting and multi-modality product offerings, which it will now be able to pursue on a national scale.

Reflect Scientific (RSI; Orem, Utah), which makes laboratory equipment and related supplies for the life sciences industry, has signed the final merger agreement to acquire All Temp Engineering (ATE; San Jose, California), which it first reported it intended to buy in August (MDD, Aug. 8, 2006).

ATE will be integrated with Reflect’s Cryometrix business unit, and the company said that the addition of ATE staff is “integral to RSI’s growth plans.”

“The ATE staff provides Engineering, Sales and Service for existing ULT freezer systems and have a unique opportunity to engage customers and inform them of the recent ULT freezer system advances made by Cryometrix,” said John Hammerman, Cryometrix general manager. “We feel this acquisition will expedite the sale of freezers developed by the Cryometrix business unit which manufactures ULT freezers that demonstrate significant improvements and customer benefits over mechanical freezers currently in service.”

ATE has been providing engineered solutions and services to the cryogenics industry for more than 23 years.

In other dealmaking news:

• Tripos (St. Louis) said it had entered into an agreement to sell substantially all of the assets of its Discovery Informatics business to Vector Capital (San Francisco), a private equity boutique specializing in buyouts, spinouts and recapitalizations of established technology businesses.

Tripos will sell Discovery for about $25.6 million in cash, subject to adjustment based upon net working capital at closing. It will retain certain assets and substantially all the liabilities of the business, which must be disposed of or satisfied before any distribution to shareholders.

The transaction is subject to customary conditions, including approval by Tripos’ stockholders and limited post-closing indemnification.

Seven Hills Partners acted as exclusive financial advisor to Tripos.

This asset sale, expected to close in 1Q07, is an initial step in the liquidation of Tripos. Liquidating distributions, in an amount to be determined, are expected to begin about six months after the closing of this transaction.

Tripos’ preliminary estimate is that there would be between $6 million to $12 million available for distribution to stockholders assuming completion of the sale of Discovery Informatics to Vector, sale of its Discovery Research business, completion of other transactions, and satisfaction of all its liabilities. Tripos previously reported “advanced discussions” to sell its U.K.-based Discovery Research business and assets.

Tripos provides chemistry-research products and services for the biotechnology, pharmaceutical and other life science industries.

• Talecris Plasma Resources, a subsidiary of Talecris Biotherapeutics (Research Triangle Park, North Carolina), has finalized the acquisition of 58 plasma collection centers from International BioResources (IBR; Lafayette, Louisiana). Terms of the acquisition, which the companies agreed to Nov. 1, were not disclosed.

Of the 58 purchased centers throughout the U.S., 21 are licensed, 12 are operating and awaiting FDA approval for licensure, and 25 are under various stages of development. Talecris said the acquisitions secure its supply of human plasma — a key manufacturing source material for biotherapeutics.

The workforce of the 58 plasma centers has been offered positions at Talecris Plasma Resources, bringing it an additional 1,000 employees.

• BioMed Realty Trust (San Diego) reported that it has completed the previously reported acquisition of the Center for Life Science Boston in Boston's Longwood Medical Area.

The 702,940 square foot life science research building is under construction and scheduled for delivery in 2008. The project is 80% pre-leased to four life science institutions — Beth Israel Deaconess Medical Center, Children’s Hospital Boston, Dana-Farber Cancer Institute and the CBR Institute for Biomedical Research.

BioMed said it expects to invest more than $700 million in the center, including the initial purchase price of about $473 million and future construction costs.

To finance the acquisition and future construction costs, the company entered into a secured acquisition and construction loan with KeyBank National Association to provide borrowings of about $550 million.

BioMed is focused on providing real estate to the life science industry.

Implant OK riles women’s groups, pleases plastic surgery industry

The FDA’s decision to approve silicone gel-filled breast has drawn sharp criticism from groups such as the National Organization for Women (NOW; Washington), which calls it a “reckless” decision.

But organizations representing the plastic surgery industry say the approval gives women in America “options” that are long overdue.

Laurie Casas, MD, spokeswoman for the American Society for Aesthetic Plastic Surgeons (ASAPS; New York), said, “What this means for women is that science prevails. The FDA, we believe, really showed that with this decision. Women and the plastic surgeons that care for them now have choices, and after being explained all the different options ... many women will chose saline, but many women will also choose silicone and that’s a great thing to have options.”

Casas said the patients who will benefit most from the approval are thin women without the breast tissue to cover saline implants because silicone looks and feels more natural. Those are also the patients most likely to seek breast augmentation, she said, contrary to popular belief.

“The people who get augmentation are those without breast tissue; it’s not the women with beautiful C-cup breasts who want double Ds,” Casas said.

According to the ASAPS about 300,000 women chose breast augmentation in 2005, and nearly 58,000 women had breast reconstruction in 2005.

Vowing to fight the decision is NOW. Kim Gandy, the organization’s president, said that the FDA “has never rescinded approval for a medical device after it has been approved, but that’s not going to stop NOW from trying.” “When the new Congress takes office we will petition our representatives to initiate an immediate review of the FDA and this dreadful, dangerous decision.”

Gandy told MDD that the FDA’s decision puts money in front of women’s health.

“We think it really is an issue of this being a multi-multi-million dollar industry — perhaps a multi-billion dollar industry, or will be — and when there’s that much money on the table women’s health concerns go on the bottom of the list.”

According to NOW, evidence has accumulated in recent months that manufacturers withheld critical information demonstrating that silicone implants are not safe. The organization accuses the FDA of showing little interest in concerns expressed by its own scientists or the allegations of industry whistleblowers.

NOW says it has heard from “many” women who believe that their silicone breast implants have adversely affected their children’s health. “We see this all the time. It would break your heart to see what happens to these women,” Gandy told MDD. “I find it difficult to understand how any industry or profession could be so heartless.”

Command Trust Network (Washington) also has opposed the approval, citing independent studies that show “virtually all silicone breast implants disintegrate in the body over time,” that half of silicone implants fail within 10 years and that 75% of them will rupture within 20 years.

“The FDA has decided to approve now, and collect safety data later,” said Sybil Goldrich, a long-time advocate concerning breast implant issues. “It is simply unacceptable to lift restrictions on the sale of these devices when there are so many known problems and so many unanswered questions.”

Goldrich was one of the first women to speak out publicly about problems with silicone gel breast implants when she published her story in Ms Magazine in 1988. Her appearance on CBS’s “Eye to Eye with Connie Chung” and subsequent activism led to restrictions on the sale of the devices in 1992. Goldrich had four separate sets of implants after mastectomy. Later surgery found silicone in her liver, uterus and ovaries. —Amanda Pedersen

MDD releases new report on orthopedics market

The publishers of Medical Device Daily have just released a new 200-page report focusing on the orthopedics sector, Orthopedics 2006 – Trends, Challenges and Opportunities. The report provides detailed insight into the trends impacting the orthopedics sector.

By focusing on emerging technologies and device developments in orthopedics, this new report divides the industry into its primary sub-sectors, and describes the key companies and device technologies being developed in each. “Aside from analysis we provide on the emerging sectors, we also delve into which areas are most vulnerable to current pricing pressures, such as the impact of hospital influence on the industry, along with recent FDA actions,” says Associate Managing Edi-tor Holland Johnson.

For information on purchasing this report, call our customer service department at 1-800-688-2421 or 1-404- 262-5476, or go to www.MedicalDeviceDaily.com.