A Diagnostics & Imaging Week

Ventana Medical Systems (Tucson, Arizona) reported signing an agreement to acquire Vision Systems (Melbourne, Australia), a manufacturer of instruments and reagents for anatomical pathology and research laboratories. Ventana will pay about $346 million in cash (A$2.13 a share) for all of the shares of Vision Systems and retirement of Vision Systems' convertible debt.

It said the merger has been approved by the boards of both companies.

Ventana said that the combination "creates a global supplier of solutions spanning the anatomical pathology environment."

Founded in 1987, Vision Systems, founded in 1987, has operations in Australia, the U.S. and the UK and operates in two business segments: Vision BioSystems and Invetech.

Vision BioSystems manufactures automated instruments, including the Peloris tissue processor and the Bond-maX advanced staining system, as well as Novocastra antibodies and biochemical reagents for biopsy-based detection of cancer and infectious diseases.

Invetech, which Vision Systems calls its "core product development engine," is a provider of research and product development services to diagnostic and life science companies.

Vision Systems' revenues are estimated to be about $80 million (A$106 million) for the fiscal year ended June 30, 2006, about 27% of the estimated combined revenues of the two companies for the 12 months ended June 30.

Christopher Gleeson, president/CEO of Ventana, said, "The combination of our respective instrument technologies and expansion of our reagent development and manufacturing capabilities are very complementary, and together with an expanded sales and support infrastructure, the consolidated company has a unique platform for growth. In addition, we will be able to utilize Invetech's core expertise to accelerate product development . . ."

Ventana said that the combined company is expected to expand Ventana's advanced staining product offerings via Vision Systems' portfolio of Novocastra antibodies and reagents as well as its Bond-maX staining system; strengthen its tissue preparation and primary staining offerings with the addition of the Peloris tissue processor and other products; and accelerate product development and revenue growth through expanded R&D and engineering.

Ventana said the transaction is expected to be neutral to EPS in 2007 and accretive thereafter. It said its 2006 outlook remains unchanged, excluding any transaction accounting impact, and that it will provide guidance for any transaction accounting impact and for 2007 "in due course."

The transaction is subject to various approvals, with closing targeted for 4Q06.

Merrill Lynch & Co. is acting as financial advisor, and Wilson Sonsini Goodrich & Rosati and Baker & McKenzie are acting as legal counsel to Ventana. Caliburn Partnership is acting as financial advisor, and Minter Ellison is acting as legal counsel to Vision Systems.

Ventana manufactures instrument/reagent systems that automate slide preparation and staining in anatomical pathology and drug discovery laboratories.

In other financing activity:

• BD (Becton, Dickinson and Co.; Franklin Lakes, New Jersey) on Tuesday said it has filed a statement with the Securities and Exchange Commission to acquire the 93.5% of the outstanding shares of TriPath Imaging (Burlington, North Carolina) which the company does not already own for $9.25 per share, or about $350 million.

The proposed share price was a nearly 80.7% premium to the TriPath's prior closing price of $5.12 a share. Shares of TriPath surged $3.83, or 74.8%, to $8.95 in aftermarket trading on the INET electronic exchange after BD's announcement.

Asked by Diagnostics & Imaging Week what specific synergies the company believes will justify this premium, a BD company spokesperson declined further comment beyond the company press release saying the deal is "still in the early stages of negotiation."

The proposal was solicited by TriPath in connection with the culmination by that company of a process to explore alternatives.

TriPath develops solutions to improve the clinical management of cancer, including detection, diagnosis, staging and treatment.

The two companies have participated in a collaboration to identify bio-markers for various cancer diagnostics since July 2001 via TriPath's Oncology business unit, at which time BD acquired the roughly 6.5% equity interest that it currently holds.

BD said the proposed acquisition of TriPath, which is expected to be minimally dilutive to its FY07 earnings (excluding an anticipated charge for in-process R&D), fits with its objective of advancing its presence in cancer diagnostics.

Assuming that BD's proposal is accepted and definitive agreements are executed, BD said it anticipates transaction close in the first quarter of BD's 2007 fiscal year.

BD employs more than 25,000 people in about 50 countries throughout the world.

• Ciphergen Biosystems (Fremont, California) and Bio-Rad Laboratories (Hercules, California) have signed an agreement for Bio-Rad to acquire Ciphergen's proteomics instrument business which includes Ciphergen's Surface Enhanced Laser Desorption/Ionization (SELDI) technology, ProteinChip Arrays and accompanying software.

Bio-Rad will purchase the business for about $20 million in cash. In addition, Bio-Rad is making a $3 million equity investment in Ciphergen.

Bio-Rad will provide the SELDI technology to the life sciences marketplace for proteomics applications, such as biomarker discovery, characterization and validation.

Ciphergen will retain exclusive rights to the diagnostics market. In addition, Ciphergen will have a supply agreement with Bio-Rad to purchase SELDI instruments and consumables for the continued development of its diagnostics business.

The companies said they will collaborate to identify SELDI customers interested in partnering with Ciphergen to commercialize biomarker discoveries.

"With Bio-Rad as a strategic partner, Ciphergen can accelerate its transformation into a specialized diagnostics provider," said Gail Page, president/CEO of Ciphergen.

With completion of the transaction, Ciphergen will have about 40 employees working to commercialize its diagnostic tests, with an initial focus on ovarian and prostate cancer.

Ciphergen entered a three-year strategic alliance with Quest Diagnostics (Lyndhurst, New Jersey) in 2005 to develop and commercialize proteomic diagnostic tests from its pipeline, including the first proteomics-based test for ovarian cancer.

Ciphergen said it currently expects that the stockholder meeting to approve this transaction will be held in 4Q06; with approval, the transaction will close promptly after that.

Bio-Rad develops products for the life science research and clinical diagnostics areas.

Ciphergen develops molecular diagnostic products.

• Global Immune Technologies (GIT; Vancouver, British Columbia) said it has inked a securities exchange agreement (SEA) proposing a reverse merger with Primedical International (PI; New Haven, Connecticut). The combined company, to be renamed Primedical International Holdings, will be a provider of telemedicine and remote ambulatory monitoring.

GIT will acquire PI's ambulatory ECG monitoring business, including iCardia Healthcare, the North American cardiac monitoring service, for a combination of convertible debt and equity. The agreement also provides for the transfer of intellectual property from Medical Monitors (MM), an Australian Stock Exchange-listed company, subject to ratification by MM shareholders. In further consideration, GIT will issue PI and MM non-interest bearing notes, convertible into GIT common shares at no less than 40 cents and no greater than $1 a share.

Primedical said it plans to grow its current business in North America through its subsidiary iCardia Healthcare, and to expand into Europe and the Far East through joint ventures and acquisition of regional monitoring service companies.

• Hologic (Bedford, Massachusetts), a provider of diagnostic and digital imaging systems for women's health, reported that the Federal Trade Commission (FTC) approved an agreement settling its dispute with Hologic regarding the company's acquisition of the Mammotest prone bed breast biopsy system intellectual property acquired as part of the mammography intellectual property assets purchased from Fischer Imaging (Denver) in September 2005.

Following the FTC's preliminary approval of the agreement in July, Hologic completed the sale of all of the intellectual property relating to the Mammotest system to Siemens (Munich, Germany) for a cash payment of $6.5 million.

Hologic retains a royalty-free, non-exclusive, perpetual, irrevocable, worldwide right and license to use the intellectual property relating to the Mammotest system.

Hologic's core business units are focused on mammography and breast biopsy, osteoporosis assessment, and mini C-arm and extremity MRI orthopedic applications.