A Medical Device Daily
U.S. Surgical (Norwalk, Connecticut), a subsidiary of Tyco Healthcare (Mansfield, Massachusetts), yesterday said it has agreed to acquire Confluent Surgical (Waltham, Massachusetts), a developer of polymer-based technology used in sprayable surgical sealants and anti-adhesion products, for $245 million.
The boards of Tyco and Confluent have approved the transaction, expected to close by the end of August. Tyco said it would incur a charge in 4Q06 to write off in-process R&D.
Confluent markets a neurosurgical sealant that was the first product to receive FDA approval for use in cranial dural repair. This sealant, along with several other products in the company's pipeline, is intended to reduce leaks or adhesions across various surgical specialties.
U.S. Surgical said that over the next six years, the biosurgery market – estimated at $900 million – is expected to double in size, and the acquisition thus positions it for competition in that sector.
Confluent Surgical is an excellent strategic fit for Tyco Healthcare,” said Rich Meelia, CEO of Tyco Healthcare. “This acquisition will expand U.S. Surgical's Syneture suture product portfolio, as well as the Autosuture division's surgical stapler franchise.”
A major business segment of Tyco (Pembroke, Bermuda), Tyco Healthcare manufactures disposable medical supplies, monitoring equipment, wound closure products, advanced surgical devices, medical instruments and bulk analgesic pharmaceuticals.
Leman Cardiovascular (Lonay, Switzerland) reported that it has purchased Hancock Jaffe Laboratories (HJLI; Irvine, California), for an undisclosed amount.
With the acquisition, Leman said it realizes its first business development objective. It said that both companies have expertise in biological cardiovascular implants, in particular proprietary tissue treatments and biologic heart valve and vascular graft design and manufacturing.
Dr. Benedict Broennimann, president/CEO of LCV, said that with the purchase, it has acquired “technology rights for tissue processing that has proven successful in heart valve manufacture as well as facilities that are FDA- and ISO 13485:2003-compliant. We are enthusiastic to team up with people who have such a strong experience in biological tissue treatment and biological heart valve manufacturing. Now that Leman Cardiovascular is international, we shall further pursue our business development strategy and are already looking at other strategic alliances.”
Leman puts the cardiovascular market worldwide at $20 billion, with the heart valve replacement market at $1 billion.
Founded in 2004 to manufacture cardiovascular surgical devices, Lehman says its first product in development is a third-generation biological heart valve, with plans for introduction in 2008.
HJLI, founded in 1987, develops biological tissue solutions to treat cardiovascular disease. Its ProCol Vascular Bioprosthesis received FDA approval for the creation of a bridge graft in patients requiring vascular access. The company's PeriPro Pericardial Patch is FDA-cleared for use in cardiovascular surgery.
In other dealmaking activity:
• Eclipsys (Boca Raton, Florida) reported closing on its acquisition of laboratory information systems company Sysware Healthcare Systems (Southfield, Michigan). The deal, the value undisclosed, was first reported last month.
Eclipsys in June unveiled an agreement to acquire the Sysware business, including Sysware's related software-development organization in Baroda, India (Medical Device Daily, June 13, 2006).
The two companies have shared a business relationship since 2004, with Eclipsys marketing Sysware's PowerLAB solution under the Eclipsys Sunrise Laboratory brand. Eclipsys said the acquisition builds on that partnership and acknowledges the value of an integrated laboratory information system as a core module of Eclipsys' Sunrise Clinical Manager suite of clinical information solutions.
R. Andrew Eckert, Eclipsys president/CEO, said, “We believe that the combination . . . will enable us to deliver integrated, innovative solutions to the market, more quickly and efficiently.”
Closing of the acquisition of Sysware's sister company in India, which provides development services related to the laboratory software, is pending final Indian regulatory approvals and is expected “to occur soon,” Eclipsys said. In the meantime, Eclipsys is operating the Indian business under a management agreement.
Eclipsys said the transaction is not expected to have a material impact on its results for 2006.
Eclipsys is a provider of information software, clinical content and professional services.
• Arcadia Resources (Southfield, Michigan), a provider of home care services and products, including respiratory and durable medical equipment (DME), reported acquiring three DME locations in Naples, Sarasota and Englewood, Florida, from Alliance Oxygen & Medical Equipment (Ontario, California), a provider of in-home respiratory services and equipment, with about $5.4 million in annual revenue.
John Elliott II, CEO and chairman of Arcadia, termed Southwest Florida a Top 10 “gray market,” and said that with Alliance's “regional presence and high-quality products and service line, we can continue to capitalize on the $5 billion U.S. home respiratory equipment market.” He said the deal helps create “a balanced revenue mix focused on higher margin services such as DME, and complements our efforts to create new cross-selling opportunities . . .”
• Ochsner Health System (New Orleans) said it has agreed to purchase from Tenet Healthcare (Dallas) three Louisiana hospitals: Kenner Regional Medical Center (Kenner), a 203-bed acute-care hospital; Meadowcrest Hospital; andMemorial Medical Center (New Orleans), a 207-bed general medical and surgical acute-care facility, including the New Orleans Surgery and Heart Institute.
Meadowcrest and Kenner Regional will remain open as acute-care facilities. Memorial Medical Center, currently closed, was a 317-bed tertiary care center. Although the main hospital has been closed since Hurricane Katrina, the New Orleans Surgical & Heart Institute, a component of the Memorial campus, will open this fall.
“Our goal with this acquisition is to focus our collective strengths and talents to support a better future for our community,” said Patrick Quinlan, MD, CEO of Ochsner.
“We began discussions with Tenet in late 2005 regarding a partnership or other affiliation, and subsequently came to a mutual decision for Ochsner to purchase these hospitals from Tenet and operate them within our system,” said Warner Thomas, president/chief operating officer of Ochsner.
Ochsner said it would work to increase available beds at Kenner Regional and Meadowcrest “as the need arises.”
Thomas added: “Although Ochsner continues to face reimbursement challenges, with this acquisition we will be well positioned to further support the repopulation of the city and we are confident that reimbursements for medical services for all patients will continue to be made available.”
The Ochsner system includes three acute-care hospitals, a sub-acute facility and 25 clinics throughout Southeast Louisiana.