A Medical Device Daily
Spacelabs Healthcare (Issaquah, Washington), a business of OSI Systems (Hawthorne, California), has entered into a stock purchase agreement with Ferraris Group (Birmingham, UK) to acquire Del Mar Reynolds and Del Mar Reynolds Medical (together, 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; in a further earn-out provision requires Spacelabs will pay Ferraris up to $9.1 million in cash/stock milestones if DMR achieves certain FY07 revenue targets.
DMR manufactures cardiac monitoring systems, including 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 acquisition will provide expanded product offerings to the hospital market, with DMR's cardiac monitoring systems marketed in conjunction with Spacelabs' core 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 markets.
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. and 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. As of 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 manufactures medical equipment and services including 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 dealmaking activity:
• Invitrogen (Carlsbad, California) reported that it has licensed from Geron (Menlo Park, California) intellectual property to manufacture and sell media, additives and reagents for use by human embryonic stem cell (hESC) researchers and enabling Invitrogen to provide research-use-only sublicenses for the products.
Geron will receive license payments and royalties on products developed under the agreement, but specific financial terms were not disclosed.
The licenses include rights under Geron's patents covering the growth of hESCs in the absence of feeder cells, as well as additional patents covering specific media formulations for such feeder-free growth. Undifferentiated hESCs have been grown in direct contact with mouse feeder cells or in media conditioned by such feeder cells.
Geron scientists have developed techniques for growing hESCs without the use of feeder cells, thereby increasing scalability and reproducibility of hESC culture and reducing the risk of contamination of the hESC populations by infectious agents from the feeder cells or other animal-sourced culture components – methods required for commercial manufacture of hESCs for producing human cell therapeutics, Geron said.
Joydeep Goswami, PhD, Invitrogen's vice president of stem cells and regenerative medicine, said the license provides a platform “for creating chemically defined, animal-origin-free hESC culture media that provide a better, more reproducible system for scientists to grow cells. Additionally, it will set the stage for quickly, safely and economically conducting the research and efficiently moving products through development and into the clinic.”
Invitrogen provides technologies for disease research, drug discovery and commercial bioproduction. Geron develops products for the treatment of cancer and degenerative diseases, spinal cord injury, heart failure, diabetes and HIV/AIDS, using its expertise in telomerase and human embryonic stem cells.
• 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 will continue to offer licenses to these patents.
Fisher Biosciences provides products and services across 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, enable testing for organisms and genetic-based diseases by automating manual laboratory procedures.