MDS (Toronto) reported signing an agreement to sell its Canadian laboratory services business, MDS Diagnostic Services, one of Canada's major laboratory service providers, to Borealis Infrastructure Management (Toronto) in a C $1.325 billion transaction.
MDS said the sale is designed to shift the company's focus "to the life sciences market." It said that this strategy — initiated in September of 2005 — includes streamlining its cost structure and selling non-strategic assets. The deal is projected to close by the end of January 2007.
MDS Diagnostic Services has annualized revenues of C$335 million and employees more than 2,900.
The spin-off "represents a major milestone for MDS in the transition to a global life sciences company," said Stephen DeFalco, president/CEO of MDS. "We will be able to focus exclusively on life sciences markets, where incredible advances are being made to diagnose and treat diseases."
Michael Rolland, senior vice president of Borealis, said, "We look forward to working with the talented professional staff at MDS Diagnostic Services to ensure that they continue to lead the industry in the delivery of laboratory services that support the healthcare needs of Canadians."
From the total transaction price of C$1.325 billion, MDS expects to realize about C$1.052 billion, after provision for taxes, expenses and amounts attributable to minority interests. It said that a portion of these funds may be retained for up to 18 months, contingent specific transition obligations of MDS.
Customary closing conditions include approval from the shareholders of LPBP, the limited partner of the entity that owns the assets used in the Ontario Laboratory Business.
MDS said that following deal close it will make changes to its capital structure and will use C$500 million of the proceeds to fund a one-time share buyback, subject to regulatory approval, and it will discontinue the payment of its quarterly dividend. It said it will invest the remainder of the proceeds in its life sciences businesses.
MDS claims market leadership in drug discovery instruments, molecular imaging, radiopharmaceutics and contract research services, providing products and services for development of new drugs and diagnostics.
It reports $1 billion in life sciences revenues and that following the spin-off it will generate 95% of its revenue from global markets by the end of the fiscal year.
It sees higher growth rates in its three business units: MDS Sciex, a provider of analytical instruments; MDS Nordion, a provider of medical isotopes and manufacturer of radiotherapeutics; and MDS Pharma Services, a provider of early-stage drug discovery tools.
Borealis bills itself as a leader in infrastructure investing, with assets in a wide variety of industries.
Tm Bio reports respiratory panel results
Genetic test developer Tm Bioscience (Toronto) reported results from the North American arm of its clinical trial for the ID-Tag Respiratory Viral Panel (RVP), a test for the detection of the majority of strains and subtypes of respiratory viruses, including respiratory syncytial virus (RSV) A and B, influenza A (with sub-typing) and influenza B.
Presented at the Planet xMAP conference in Amsterdam on Oct. 3-4, the results show an overall 98.5% agreement between the ID-Tag RVP and the current standard for testing, direct fluorescent antibody (DFA) combined with cell culture. The agreement is based on comparing 4,460 results generated from patient samples by the multiplexed RVP assay for which the presence or absence of a particular virus was established either by DFA or cell culture. Current DFA/culture algorithms used in routine diagnostic testing may take two to 10 days to generate a result for only a subset of the targets studied in this trial, Tm Bio says. ID-Tag RVP provides a result in six hours.
"When a patient presents with symptoms of a respiratory infection, having a test that rapidly identifies the specific virus or rules out viral infection will greatly enhance infection control measures and facilitate treatment," said Dr. Jeremy Bridge-Cook, senior vice president, corporate development, for Tm Bio.
The company projects that the IVD version will win CE marking this quarter, with commercial availability in North America "shortly thereafter."
Europe C-Arm market thriving, says F&S
The need to replace existing image intensifier-based systems with flat panel detectors (FPD) is driving the European C-Arms market, according to a new report from Frost & Sullivan (F&S; London).
This trend has been spurred by the need for complete workflow integration in a fully digital radiology environment, according to the F&S report. "FPDs provide improved, distortion-free images in comparison to image intensifiers. However, their high cost, coupled with a lack of funding for healthcare projects, will pose an important limitation to their adoption in the mobile C-Arms segment," it says.
F&S says that the European C-Arms Market earned revenues of $375.2 million in 2005 and estimates this to reach $548.8 million in 2012.
"New systems fitted with FPDs instead of conventional image intensifiers are replacing fixed C-Arm systems across Europe," said, Karthik Arun, F&S medical imaging team leader. "This trend will be evident in mobile C-Arms too by the year 2008 and will be the single, most important factor driving this market."
FPDs make the C-Arm system inherently digital and eliminate the need for analogue-to- digital conversion of images captured using an image intensifier. Moreover, they are lighter and more compact, enabling ease of handling during procedures using mobile C-Arm systems. FPDs also provide distortion free images.
These advantages, combined with the push towards a completely digital radiology environment, will motivate the C-Arms market to completely convert to FPDs. However, due to their high cost, FPDs are not yet being widely adopted by mobile C-Arm users and vendors.
Furthermore, with Europe being on a capital investment model, C-Arms — especially mobile systems — tend to take a back seat when it comes to resource allocation, resulting in prolonged replacement cycles, according to F&S.