In a move that may augur a more concentrated focus in the medical device market, pharmaceutical powerhouse Merck (Whitehouse Station, New Jersey) last month agreed to acquire a roughly 11% stake in FoxHollow Technologies (Redwood City, California) and expand the scope of their existing collaboration for atherosclerotic plaque analysis. Merck will purchase $95 million worth of FoxHollow stock while investing another $100 million in the company over four years to expand the collaboration, with an option for further expansion for an additional 11 years. The agreement calls for Merck to pay $40 million to FoxHollow over four years in exchange for FoxHollow’s agreement to collaborate exclusively with Merck in specified disease areas. If Merck extends the collaboration program beyond this period for further collaboration, Merck would pay $10 million per year, which may be offset by potential royalties and milestones. Merck also will provide a minimum of $60 million in funding to FoxHollow over the first three years of the four-year program for research to be conducted by FoxHollow under Merck’s direction, including removal of atherosclerotic plaque from patient arteries for analysis, conduct of clinical trials and drug profiling by Merck. FoxHollow will receive milestones on development of drug products or diagnostic tests using results from the collaboration, as well as royalties. Merck also will acquire newly issued shares of FoxHollow common stock at $29.629 a share. FoxHollow will appoint a Merck representative to its board, increasing its size to six members, and receive certain protective provisions. “We see great potential in the combination of our expertise in the medical device space with Merck’s worldwide leadership in cardiovascular research, drug discovery and development as we continue to move forward in the fight against vascular disease,” said Duke Rohlen, president of strategic operations for FoxHollow during a conference call discussing the collaboration. In September 2005 the two companies formed what they called the first pharmaceutical/medical device partnership for identifying cardiovascular biomarkers for diagnostics and as tools for drug development. The expanded collaboration remains focused on the analysis of atherosclerotic plaque collected from patients treated with FoxHollow’s SilverHawk plaque excision system. The scope of the studies has been increased and other disease areas have now been added, the companies said in a statement. The expanded collaboration also will enable FoxHollow to use human plaque analysis to enhance the capabilities of its NightHawk intravascular plaque imaging system, and accelerate its anti-restenosis drug therapy program.

• Syscore, a company belonging to the family office of German billionaire Sylvia Str her, said it has reached an agreement with the existing shareholders of Berlin Heart (Berlin) to acquire 100% of that company’s shares. The parties agreed not to disclose the purchase price. Berlin Heart is a maker of ventricular assist devices, “With Syscore as our long-term investor we will be able to accelerate our growth, particularly for our flagship products Excor and Incor. Specifically, this new investor means that we will be able to build on our position in the U.S. market, where we have been present since 2005,” said the company’s new CEO, Rolf K se, MD. Syscore said it will provide additional capital to implement the ambitious business plan. Additionally, the successful cooperation is to be expanded with the German Heart Centre (Munich) under the leadership of Roland Hetzer, MD, who will continue to support Berlin Heart with a seat on the company’s advisory board. As an initial public offering is not planned, the company will change its legal structure from an AG to a GmbH as part of the transaction, enabling what it said is a “faster and more flexible response to market developments.” Syscore was advised on the transaction by Sal. Oppenheim (Cologne). Berlin Heart bills itself as the European market leader for cardiac support systems, and manufactures pumps, cannulas and external components for internal and external use to stabilize cardiac activity in acutely ill patients. The company employs more than 130 people and reported revenues of nearly EUR15 million in 2005.

• Thoratec (Pleasanton, California) reported that its International Technidyne (ITC; Edison, New Jersey) division acquired A-VOX Systems (San Antonio, Texas), a manufacturer of point-of-care (POC) instruments and disposables to perform CO-Oximetry testing. ITC acquired all outstanding shares of privately held Avox for about $9 million in cash, and Avox has become a subsidiary of ITC. “This transaction is an important event for ITC as it broadens our offerings for hospital POC testing, particularly in the cardiac catheterization lab where Avox has an industry-leading presence,” said Gary Burbach, president/CEO of Thoratec. Avox manufactures two devices designed to utilize light-scattering technology to make direct measurements in whole blood. The AVOXimeter 1000E is designed for the cardiac catheterization lab. The portable AVOXimeter 4000 provides a rapid assessment of a patient’s oxygenation at the bedside. The AVOXimeter 4000 is used in routine testing. ITC said it will to continue manufacture the Avox devices at the facility in San Antonio, with a consolidation of those activities into ITC’s Edison manufacturing facility in 2007.

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