A Medical Device Daily
Royal Philips Electronics (Amsterdam, the Netherlands) and Witt Biomedical (Melbourne, Florida) have unveiled plans for Philips to acquire Witt – which it calls the largest independent supplier of hemodynamic monitoring and clinical reporting systems used in cardiology cath labs – for about $165 million.
Through the acquisition, scheduled to close in the second quarter of 2006, both companies expect to benefit from being able to offer customers an integrated suite of technologies for the cath lab, and promoting sales in cardiovascular X-ray, cardiology picture archiving and communications systems (PACS), and in hemodynamic monitoring and reporting systems.
Hemodynamic monitors measure and monitor a patient's ECG, blood pressure and other vital signs associated with a cath lab procedure, and the companies said that with the growing digitization of hospitals, cardiologists are demanding that cath labs be integrated into a hospital's information technology infrastructure.
Philips says that in 2005 it held the No. 1 global position in cardiovascular X-ray and in cardiology PACS. In hemodynamic monitoring and clinical reporting systems, Witt was the No. 2 supplier in the global market.
“Witt Biomedical is not only an exceptional company with an established track record in developing innovative solutions for the cath lab,“ said Jouko Karvinen, CEO of Philips Medical Systems (Best, the Netherlands), “it's also a leader in its field. By merging Witt Biomedical with Philips' . . . position in the cardiovascular X-ray and cardiovascular PACS markets, we intend to obtain a leading position in the growing market for fully integrated cath labs.“
Witt reported unaudited results for 2005 sales of around $49 million, a growth in sales of 18% over 2004, and an operating margin of 30%.
Philips said it expects the acquisition of Witt to be marginally accretive from 2008 onwards, with initial margin dilution due to purchase accounting treatment. Upon deal close, Witt Biomedical will be integrated into the Cardiovascular X-ray business unit within Philips Medical Systems.
Terence Witt, founder and CEO of Witt, said that with Philips' global reach, “there's clearly an opportunity for Witt Biomedical to further build on our presence beyond our base in North America. We believe this deal makes sense for our current and future customers, as we combine our respective strengths in cardiology.“
Cardium Therapeutics (San Diego) reported buying InnerCool Therapies (also San Diego), a developer of therapeutic hypothermia technologies.
Cardium will issue to InnerCool shareholders 2.5 million shares of Cardium common stock (less than 8% of its outstanding shares after the acquisition) and assume certain outstanding liabilities of about $560,000. InnerCool investors also will be entitled to a one-time product success payment of $5 million upon full calendar-year revenues from the commercial sale of InnerCool products exceeding $20 million.
Cardium said it would operate InnerCool through a newly-formed, wholly-owned Delaware subsidiary, InnerCool Therapies Inc .
InnerCool manufactures endovascular systems designed to rapidly and controllably cool the body. Its flagship product, the Celsius Control System, is being used in surgical and intensive-care hospital units.
The InnerCool acquisition “brings a cutting-edge medical device business to complement and leverage our biologics approach to treating heart disease,“ said Christopher Reinhard, CEO and chairman of Cardium. “Cardium's focus and depth of experience in developing product candidates for cardiovascular disease . . . provide us with a dynamic opportunity to acquire selected products and product candidates and advance them to appropriate value-enhancing or partnering opportunities.“
The Celsius system received FDA 510(k) clearance for use in inducing, maintaining and reversing mild hypothermia in neurosurgical patients, in surgery and in recovery or intensive care. It also received FDA clearance for use in cardiac patients in order to achieve or maintain normal body temperatures during surgery and in recovery/intensive care, and as an adjunctive treatment for fever control in patients with cerebral infarction and intracerebral hemorrhage. The system has the CE mark and a TGA approval for marketing in Australia.
The system consists of an endovascular cooling catheter, fluid circuit disposables and an operational console. Therapeutic hypothermia is believed to work by protecting critical tissues and organs such as the brain, heart and kidneys following acute ischemic or inflammatory events, by lowering metabolism and preserving cellular energy stores, thereby potentially stabilizing cellular structure and preventing or reducing injuries at the cellular, tissue and organ level.
Cardium noted that the American Heart Association (AHA; Dallas) recently revised its treatment guidelines to recommend the use of therapeutic cooling as part of the critical care procedures for patients with an out-of-hospital cardiac arrest following ventricular fibrillation. It said studies for additional indications with InnerCool's system are expected to be conducted in collaboration with the AHA and with the National Institutes of Health .
In October 2005, Cardium acquired a portfolio of cardiovascular growth factor therapeutics from the Schering Group (Berlin), including a later-stage product candidate, Generx, and completed a $30 million financing. Generx is a DNA-based, myocardial-derived growth factor being developed for use as a one-time treatment to stimulate the growth of collateral circulation in the heart of patients with angina pectoris.