A Diagnostics & Imaging Week

Spacelabs Healthcare (Isssaquah, Washington), a business of OSI Systems (Hawthorne, California), has entered into a stock purchase agreement with Ferraris Group (Hertford, UK/Oberthulba, Germany) to acquire Del Mar Reynolds and Del Mar Reynolds Medical (togeth-er, DMR; both Irvine, California), representing Ferraris' Cardiac Division.

Spacelabs will pay Ferraris $25.5 million ( 14 million), subject to milestone adjustments plus or minus $1.8 million, based upon DMR revenue and EBITDA results for 13 months ended Sept. 30, 2006; a further earn-out provision requires Spacelabs to pay Ferraris up to $9.1 million in cash/stock milestones if DMR achieves certain FY07 revenue targets.

DMR manufactures cardiac monitoring systems, in-cluding Holter recorders, ECG, stress systems and related software and services under the trading names, Del Mar Reynolds, Hertford Cardiology and Hertford Medical. DMR also operates a Core Lab business providing clinical trial services to drug companies and clinical research organizations.

Spacelabs said the proposed purchase will give it expanded product offerings to the hospital market, with DMR's cardiac monitoring systems marketed in conjunction with core Spacelab patient monitoring solutions and anesthesia delivery systems, as well as strengthened presence in the UK and German markets, where DMR is a leader in cardiac monitoring.

It also cited enhanced Core Lab business for clinical trials. Spacelabs and DMR both operate clinical trials core lab service businesses, Spacelabs operating primarily in the U.S., DMR primarily in Europe.

Deepak Chopra, CEO of OSI, said the acquisition "would allow us to broaden upon our patient monitoring product offering within the hospital market while essentially doubling the size and geographic presence of our Clinical Trials business."

He added: "We are extremely pleased with the performance of our healthcare business and expect that our fiscal 2006 healthcare revenue will grow at a double-digit rate driven primarily by the strong operating performance of our patient monitoring business in the U.S. market. As a result, we anticipate strong bottom line growth compared to the prior year."

DMR generated sales of $38.6 million with earnings and profits before taxation of $3.3 million. At Aug. 31, 2005, total assets attributable to DMR were $51 million and in the six months ended Feb. 28, 2006, DMR generated sales of $17.8 million. DMR employs about 233 in its five offices in the UK, Germany and the U.S.

Spacelabs provides equipment and services that include patient monitoring solutions, anesthesia delivery and ventilation systems, pulse oximeters, and sensors and bone densitometers. OSI manufactures security and inspection systems, medical monitoring and anesthesia delivery products, and optoelectronic-based components.

In other agreements news:

• Fisher Biosciences (Epsom, England) reported that through Fisher Scientific, (Hampton, New Hampshire) it has entered into an expanded polymerase chain reaction (PCR) licensing agreement with Applied Biosystems (Foster City, California), a business of Applera (Norwalk, Connecticut), to develop new real-time PCR and PCR-related reagents. Financial terms were not disclosed.

Fisher obtains patents not covered in Applied Biosystems' original licensing program, enabling ABgene (Rochester, New York/Blenheim, UK), a unit of Fisher Biosciences and a licensee under the original program since 1994, to offer reagents and kits for a range of PCR and real-time PCR instruments. Although the foundational patents covering the PCR process expired in the U.S. in March 2005, and elsewhere in March 2006, other patents related to PCR remain in force and cover enzyme compositions and certain real-time PCR methods and kits. Applied Biosystems said it would continue to offer licenses to these patents.

Fisher Biosciences provides products and services ac-ross the general chemistry and life sciences arenas. ABgene produces specialist products for nucleic acid amplification and biostorage.

• Cepheid (Sunnyvale, California), a molecular diagnostics company, reported entering into an amendment of its patent license agreement with Applera relating to real-time thermal cycler instruments. Cepheid's SmartCycler and GeneXpert real-time PCR thermal cyclers are licensed real-time thermal cyclers under Applera's U.S. patent No. 6,814,934, European patent No. EP 0 872 562, Japanese patent No. JP 3136129 and patents pending for all fields, including in vitro diagnostics.

The amendment expands the field of the license to include the detection, characterization and monitoring of HIV and hepatitis C infections. Terms were not disclosed.

John Bishop, CEO of Cepheid said the GeneXpert System "is potentially well suited to provide better patient management capability for patients dealing with these types of viral infections."

Cepheid manufactures systems for genetic analysis, enabling testing for organisms and genetic-based diseases by automating manual laboratory procedures.