A Medical Device Daily

Tutogen Medical (Alachua, Florida), a manufacturer of biological implant products made from allograft and xenograft tissue, on Friday issued a statement terming as “inadequate” an “indication of interest” by Zimmer Hold-ings (Warsaw, Indiana) to acquire all of the company's outstanding shares.

Tutogen said that on Aug. 9 Zimmer contacted it and “orally” indicated an acquisition price range of $5 to $6 a share of Tutogen common stock.

Negotiations for such an acquisition, or an increased investment in Tutogen by Zimmer, were first disclosed in March (Medical Device Daily, March, 14, 2006). Zimmer currently owns about 5.3 million shares of Tutogen common stock, about 33% of Its shares.

Tutogen said that a committee of its board – formed after Zimmer began exploring a potential transaction with the company in March – determined that this price range was insufficient and not in the best interests of its shareholders. It said the committee considered various factors, “including the company's recent financial results and current strategic plan” and decided that the best course was “continuing focus on its operating plans.”

It said, however, that it “remains open to exploring other options.” And it noted that an SEC filing by Zimmer on Aug. 9 indicated it “will not pursue an acquisition” of Tutogen at this time but may develop “other plans and/or make other proposals and take other actions with respect to its investment in Tutogen.”

Guy Mayer, CEO of Tutogen, cited shareholder and partnership relationships with Zimmer, and said, “We value their unwavering support as we progress on executing our strategic business plan with the objective of enhancing value for all of our loyal shareholders.”

Tutogen uses its Tutoplast Process of tissue preservation and viral inactivation to manufacture sterile bio-implants used in spinal/trauma, urology, dental, ophthalmology and general surgery procedures. The Tutoplast products are sold worldwide by Zimmer Spine (Warsaw) and Zimmer Dental (Carlsbad, California), Mentor (Carlsbad, California), IOP (Costa Mesa, California) and independent distributors in the U.S. and Germany.

Mentor is the exclusive distributor for the company's Tutoplast Dermis products in North America for use in the dermatology and plastic surgery markets for breast reconstruction.

Caliper Life Sciences (Hopkinton, Massachusetts) last week reported completing its acquisition of Xenogen (Alameda, California), following stockholder approvals by both firms.

The combined company – which will continue to be called Caliper Life Sciences – manufactures microfluidics, liquid-handling and imaging technologies that provide life science researchers with enabling tools.

In the merger plan, first unveiled in February (Medical Device Daily, Feb. 14, 2006), Caliper issued common stock and warrants valued at $80 million in exchange for all of Xenogen's securities outstanding.

Caliper called the acquisition “a defining step” in its plan to become a leading provider of tools and services that increase the productivity and clinical relevance of life science and drug discovery research.

Kevin Hrusovsky, president/CEO of Caliper, said, “We are very pleased to complete the Xenogen acquisition, which will further enable Caliper to aggressively pursue critical path issues of drug discovery and development by focusing on key therapeutic areas and improving the correlation between in vitro and in vivo experimental data. The integration of the two companies is off to a fast start as we begin to tap our strategic customer relationships and leverage our infrastructure to drive increased penetration of Xenogen's imaging technology into commercial accounts.”

Closing of the acquisition comes after a strong second quarter for Xenogen, recording revenues of $11.2 million, driven by 35% growth in IVIS molecular imaging system sales compared to 2Q05 sales.

Caliper also reported its most recent quarterly results. Total revenues were $24.3 million, an increase of 20% from $20.3 million in the same period in 2005.

The company reported a net loss of $2.1 million (6 cents a share) compared to a net loss of $4.2 million (14 cents a share) in the year-earlier period. Gross margins from products and services of 35% improved from 33% in the same period of 2005 and total operating expenses were $13.9 million, up about 9%, from the same period in 2005.

“Our 20% revenue growth in Q2, fueled by continued growth of microfluidics product revenues, the ongoing success of our Caliper Driven program, and the addition of NovaScreen revenues, reflects the rapid evolution of Caliper over the past 12 months,” said Hrusovsky. “The Xenogen acquisition, which we expect to be operating cash flow-accretive in 2007, accelerates our strategic transformation and positions us for sustainable revenue growth while accelerating our bottom line trajectory.”

Caliper reported that its revenue outlook for 3Q06, including the partial quarter effects of the Xenogen acquisition, is $26 million to $29 million (growth of 22% to 36% from the same period in 2005) and anticipating revenues of $110 million to $118 million for full year 2006 (growth of 26% to 36% compared to full-year 2005), projections which exclude the effect of purchase accounting adjustments on Xenogen's deferred revenue as of the closing of the merger.

Caliper is a provider of drug discovery and life sciences research solutions for the pharmaceutical and biotech sectors.

With its acquisition of NovaScreen Biosciences (Hanover, Maryland) last year (MDD, Oct. 6, 2005) and now Xenogen, Caliper says it is positioned “to transform drug discovery and development through a keen focus on clinically relevant experimentation.”

Caliper's products and services, assembled from a portfolio of microfluidics, liquid handling, and imaging technologies, span in vitro and in vivo experimentation and address issues on the critical path of drug discovery and development.