A Diagnostics & Imaging Week

Diomed Holdings (Andover, Massachusetts) has acquired exclusive distribution rights from Luminetx (Memphis, Tennessee) for the VeinViewer Imaging System for the sclerotherapy, phlebectomy and varicose vein treatment markets in the U.S. and UK.

The agreement with Luminetx includes both a $1 million phased investment in Luminetx and a grant of warrants to purchase 600,000 shares of Diomed common stock based upon the achievement of certain milestones.

The VeinViewer, cleared by the FDA in 2004, was developed by Luminetx. It is a mobile imaging system that uses infrared light which illuminates on a real-time basis subcutaneous veins to an average depth of 8 mm and projects their location on the surface of the skin with an accuracy of 0.06 mm.

The device is designed to allow physicians to visualize the exact location and orientation of the patient’s veins, thereby providing more precise sclerotherapy and phlebectomy procedures through increased accuracy in vein mapping and imaging.

“We believe that Luminetx’s VeinViewer will be an important adjunct to our core EVLT business and will enhance our competitive advantage in the treatment of venous disease,” said James Wylie, president and CEO of Diomed. “Additionally, as vein treatment continues its move from the hospital to outpatient facilities and physicians’ offices, we expect to leverage our existing sales and marketing organization by offering physicians an array of medical tools for the treatment of superficial venous disorders, from reflux of the greater saphenous vein to unsightly spider veins.”

Diomed’s target market for the VeinViewer encompas-ses physician specialties practicing radio frequency and endovenous laser ablation of the greater saphenous vein and its tributaries, including interventional radiologists, vascular surgeons, general surgeons, dermatologists and dermatologic surgeons, among others.

The company estimates that its initial VeinViewer target market of nearly 2,000 installed laser and RF systems represents less than 15% of the addressable market. The company also estimates that there are between 2 million and 3 million sclerotherapy and ambulatory phlebectomy procedures performed annually in the U.S.

Diomed develops minimally invasive medical procedures that use its laser technologies and disposable products. The company focuses on EVLT laser treatment for varicose veins, photodynamic therapy for use in cancer treatments, and dental and general surgical applications. The EVLT procedure and the company’s related products were cleared by the FDA in January 2002.

Reflect Scientific (Mountain View, California), a laboratory supply company specializing in the manufacture and distribution of scientific products for use by companies engaged in chemical analysis, biotech and pharmaceutical research, has completed its reorganization as a public company.

Reflect has been a supplier of laboratory and analytical equipment and related services to life science industries for more than 10 years.

The company said its recent attainment of public status, and the raising of capital, has placed it in a position to target a growth through acquisition strategy and leverage equity funding to take advantage of the numerous biotechnologies available to the company.

The company said it has already identified and is in discussions with several candidates, all of which offer exciting prospects for growth.

Reflect’s CEO and president, Kim Boyce, described companies it is pursuing. “We have engaged in evaluating a company that has recently developed technology that delivers drugs directly to the back of the eye for the treatment of sight-threatening diseases. This business is focused on the need to effectively provide therapeutic treatment for eye diseases such as age-related macular degeneration, diabetic retinopathy, chronic macular edema and posterior uveitis. A second company provides a revolutionary new approach to refrigeration and cryo-preservation technology. A critical need for fail-safe low and ultra-low temperature storage systems is identified and addressed by this potential acquisition. Biotech companies, military bio-research labs, and U.S. disease control centers are examples of institutions for which absolutely dependable cryogenic technologies are imperative for providing safe repositories.”

In other dealmaking activities:

• Biofield (Alpharetta, Georgia), developer of the Breast Proliferation Detection System (BDS), a non-invasive, radiation-free testing system for breast and ovarian cancer screening and diagnosis, said it has terminated discussions for a potential merger or acquisition with Bay Point Group (BPG; Miami).

Biofield and BPG entered into a letter of intent for a potential merger on June 28 (Diagnostics & Imaging Week, July 7, 2005). The letter of intent was terminated as a result of a mutual understanding that a merger would not be in the best interests of the parties at this time.

The company said it would continue to seek possibilities for expanding its women’s healthcare product line.

The merger had been contingent upon due diligence by both parties, a Biofield debt restructuring, equitable valuation of both companies and terms and conditions required to raise capital for both BPG and Biofield to continue their respective commercial clinical and regulatory compliance activities that would carry forward after a merger.

According to a Securities and Exchange Commission filing on June 22, Biofield had a net loss of $717,381 and no revenue in 1Q05, compared with a net loss of $758,612 on $10,500 in revenue in 1Q04. Since the company’s inception in 1987, it has lost $70.8 million and has generated $135,132 in revenue. Its total liabilities exceed its total assets by nearly $6.5 million.

The filing also noted that Biofield has depleted its cash resources and had to terminate all of its employees except Chief Operating Officer John Stephens and David Long Jr., MD, PhD. Long, chairman and CEO of Biofield, and his family own more than half of Biofield.

The BDS has not yet been approved by the FDA

• McKesson (San Francisco) reported completing its acquisition of Medcon (Tel Aviv, Israel) for $3.05 a share, or about $105 million. The deal was first reported in June.

A global provider of web-based cardiac image and information management addressing the needs for heart centers, Medcon’s offerings include diagnostic digital image management and archiving, procedure reporting and workflow management. In reporting the acquisition in June, McKesson said that the acquisition of Medcon would strengthen its offerings in enterprise imaging, including solutions for medical specialties such as radiology, gastroenterology, ophthalmology and cardiology.

Medcon reports more than 300 system installations around the world, including more than 100 customers in North America. The company reported sales of about $17 million for the 12 months ended Dec. 31, 3004.

McKesson said that the purchase would have no material impact on its FY06 earnings per fully diluted share; but it said that certain one-time costs would result in a negative impact to McKesson Provider Technologies’ operating profit in FY06. In FY07, the acquisition is expected to be modestly accretive to both McKesson Provider Technologies’ operating profit and McKesson earnings, it said.

McKesson is a provider of pharmaceutical and medical-surgical supply management across the spectrum of care: healthcare information technology for hospitals, physicians, homecare and payers; hospital and retail pharmacy automation; and services for manufacturers and payers designed to improve outcomes for patients.

• Bruker AXS (Madison, Wisconsin) reported that it has signed a binding agreement to acquire all shares of privately held Socabim (Paris), a company focused on advanced X-ray materials research and analysis software. The transaction is expected to close in 1Q06.

Socabim is a supplier of software for X-ray diffraction (XRD) and X-ray fluorescence (XRF) materials analysis to Bruker AXS.

With this acquisition, Bruker AXS said it is “significantly expanding” its core technology base in two of its strategic product and applications areas.

Bruker AXS intends to merge and co-locate Socabim and its French subsidiary, Bruker AXS SA, near Paris.

The two co-founders of Socabim, Julien Nusinovici and Pierre Caussin, as well as all present employees of Socabim, are expected to join the merged company, with Nusinovici and Caussin continuing their role as senior managers of the Socabim division of the merged entity.