A Medical Device Daily

IsoRay (Richland, Washington), with its subsidiary IsoRay Medical, reported signing a letter of intent with IBt (International Brachytherapy; Seneffe, Belgium) for a licensing agreement covering North America and giving IsoRay access to IBt's polymer seed technology for use with Cesium (Cs)-131 in brachytherapy. IsoRay is the sole producer of the recently introduced Cs-131 medical isotope used to treat prostate and other cancers.

In exchange, IsoRay said it will make a series of payments spread over 2005 and 2006 as a license fee and also pay a royalty on product sales based on IBt's technology through the 15-year license term.

Roger Girard, IsoRay chairman and CEO, said the company will apply for FDA approval for the use of the two technologies used in tandem. “In the long run, this could significantly reduce our manufacturing and production costs,“ said Girard. “Moreover, we believe polymer seeds have important clinical advantages, including more precise seed placement, improved dosimetry, enhanced imaging and other benefits. Through this agreement, physicians may soon be able to offer patients a new isotope and seed delivery option that will be fast and effective.“

The use of IBt's plastic seed technology with Pd-103 and I-125 is not covered by the agreement.

IsoRay manufactures Cs-131 seeds using titanium seed technology.

IBt is the owner of patents related to its products and methods of fabrication, for brachytherapy implants including polymer seed technology used to manufacture seeds containing the therapeutic isotopes Iodine-125 and Palladium-103, primarily for prostate cancer treatment.

The new agreement follows a recent announcement by IsoRay that it will begin production testing at the Idaho National Laboratory (Idaho Falls) in early 2006, which could lead to a development program enhancing its isotope production capabilities of Cs-131 at facilities in Pocatello, Idaho.

The Cs-131 isotope is currently being used in brachytherapy treatment for prostate cancer, the second leading cause of cancer deaths among men in the U.S. Protocols are scheduled to begin during 1Q06 for use of the isotope in both the lung and the pancreas. Other forms of delivery devices for the isotope also are being considered, IsoRay said.

IsoRay says that Cs-131 offers a significantly shorter half-life than the two other isotopes commonly used for brachytherapy, resulting in substantially faster delivery of therapeutic radiation, lower probability of cancer cell survival and reduction of the longevity of common brachytherapy side effects.

In other dealmaking activity:

• PainCare Holdings (Orlando, Florida), a leader in the delivery of pain management solutions, reported acquiring the assets of the Center for Pain Management (CPMASC), which owns four ambulatory surgery centers in Maryland, for $15 million in cash and restricted common shares.

CPMASC, the largest pain management specialty surgery center group in Maryland, serves patients living in five surrounding states.

PainCare's medical professionals offer pain sufferers a range of modalities, including interventional pain management, minimally invasive spine surgery and orthopedic rehabilitation. PainCare also offers ancillary services including MedX-Direct, a turnkey orthopedic rehabilitation program; EDX-Direct, a comprehensive electro-diagnostic medicine program; diagnostic imaging services; Intra Articular Joint Program, a proprietary, non-operative treatment protocol for addressing knee pain and stiffness caused by osteoarthritis; and medical real estate services.

CPMASC is expected to contribute more than $4.5 million in revenues and about $3 million in operating income to PainCare in 2006.

• BriteSmile (Walnut Creek, California), provider of teeth-whitening systems, has entered into an agreement with Discus Dental (Culver City, Oklahoma) to purchase that part of BriteSmile's business consisting of offering teeth-whitening procedures and products through existing independent dental offices known as BriteSmile Professional Teeth Whitening Associated Centers — its Associated Center Business.

Discus Dental will pay $35 million for the Associated Centers Business and intellectual property and will assume certain liabilities of the company relating to the Associated Center Business. BriteSmile said it will use the sale proceeds to reduce debt, to operate or sell its Spa Centers Business, and to continue to prosecute enforcement of certain teeth-whitening rights.

Sale of the Associated Center Business is targeted for February, conditioned on a customary financing, dismissal of litigation proceedings pending between BriteSmile and Discus Dental and approval by BriteSmile shareholders.

Following the close of the sale, Discus Dental will manufacture, market and distribute BriteSmile whitening products and accessory products to BriteSmile Associated Centers and provide support.

Discus Dental will not be acquiring BriteSmile's current Spa Centers Business, consisting of its Professional Teeth Whitening Centers in 15 cities throughout the U.S. Previously, BriteSmile announced that it had signed a binding letter of intent with Dental Spas (Fairfield, Iowa), for Dental Spas to acquire the Spa Centers Business. Negotiations continue towards a sale agreement between BriteSmile and Dental Spas for the Spa Centers Business.