Medtronic (Minneapolis) reported completing its acquisition of Transneuronix (Mt. Arlington, New Jersey), a device company focused on therapies designed to treat obesity by electrical stimulation of the stomach.
The deal, valued at about $260 million, with the potential for additional milestone payments, was first reported late last month (Medical Device Daily, June 30, 2005).
Transneuronix is focused on developing a therapy for obesity using its Transcend system, an implantable pacemaker-like device also known as a gastric pacemaker.
The acquisition follows Medtronic’s recent announcement regarding the formation of a new business unit, Medtronic Obesity Management, and it described the purchase of Transneuronix as the unit’s first entry into the obesity sector.
Transneuronix’ Transcend system employs gastric electrical stimulation (GES) for the treatment of obesity. It reports conducting research with the GES system in the U.S. and Europe for more than eight years, with more than 700 patients implanted with the Transcend.
West Pharmaceuticals (Lionville, Pennsylvania), a mak- er of syringe parts, earlier this week said it would acquire Medimop Medical Projects (Ra’anana, Israel), a maker of devices for injectable drugs. West will purchase 90% of Medimop’s outstanding shares for $36 million in cash, $4 million in stock and up to $1.8 million cash in additional contingency fees.
Freddy Zinger, founder and president of Medimop, retains the remaining 10% of the company, with West having the option to acquire his shares in the future.
West said it would finance the purchase with bank debt and planned private lender debt. The transaction is expected to close in the third quarter, with West saying that the purchase will not affect 2005 earnings on sales of $8 million for the year.
Medimop managers will remain at the company’s Israel headquarters. The company, with about 20 employees, manufactures its products in Israel and Germany.
In other dealmaking activity:
• Renal Care Group (Nashville, Tennessee) reported acquiring Bay Area Mobile Apheresis Program (San Francisco) and that it would operate the new acquisition and its program as Apheresis Care Group. Terms were not disclosed.
Prior to the acquisition, Bay Area Mobile Apheresis Program provided apheresis services to hospitals, medical centers and outpatient facilities at more than 20 California locations.
Dobri Kiprov, MD, medical director for Apheresis Care, said, “Groundbreaking therapeutic apheresis technologies, which are currently in clinical trials, promise expansion into many medical specialties and in new areas such as non-fetal stem cell research. By partnering with Renal Care Group, Apheresis Care Group will be well positioned to become a leading provider of therapeutic apheresis services throughout the U.S.”
Raymond Hakim, MD, PhD, senior executive vice president of clinical affairs and chief medical officer for Renal Care, added: “We are working to expand therapeutic apheresis as an additional service for our hospital acute programs in many markets. Recent guidelines from CMS may make this therapy available in outpatient settings in addition to being an inpatient therapy for critically ill patients.”
Renal Care provides dialysis care to more than 31,000 patients at more than 445 facilities, in addition to providing acute dialysis services at more than 210 hospitals.
• Techne (Minneapolis) reported that its subsidiary, R&D Systems (also Minneapolis) has acquired Fortron Bio Science (Morrisville, North Carolina), which makes monoclonal and polyclonal antibodies, antigens and other biological reagents.
R&D Systems simultaneously purchased BiosPacific, the primary distribution arm of Fortron. Fortron is a global supplier of biologics to manufacturers of in vitro diagnostic systems and immunodiagnostic kits used in clinical laboratory and point-of-care areas for detecting cardiovascular disease, cancer, infectious diseases, endocrine, thryroid and fertility disorders, and drugs of abuse.
Techne acquired all shares of Fortron and substantially all assets of BiosPacific for $20 million in cash. R&D Sys-tems also assumed certain liabilities of BiosPacific.
R&D Systems manufactures purified cytokines, antibodies and assay kits used by biomedical and clinical research laboratories.
Fortron and BiosPacific generated combined revenues of about $8.7 million in 2004. The acquisitions are expected to be slightly accretive to Techne’s earnings in FY06 ending June 30, 2006.
Tom Oland, president and CEO of Techne, said, “With these acquisitions we will be able to expand into the diagnostic market by offering some of our research reagents that may have future diagnostic application and/or by using our expertise to develop products specifically for the diagnostic markets.”
Dick Wicks, Fortron’s founder and president, will continue as an advisor regarding product development. Sandy Koshkin, BiosPacifics’ founder, president and CEO, will remain active in promoting relationships with diagnostic manufacturers.
Techne has two subsidiaries: Research and Diagnostic Systems and R&D Systems Europe (R&D Europe; Abingdon, UK). R&D Systems is a specialty manufacturer of biological products, while R&D Europe is a distributor of biotech products.
• Real estate investment trust Omega Healthcare Investors (Timonium, Maryland) reported the sale of four facilities in Illinois and a pending sale in Florida.
Omega reported closing on the purchase of two Texas skilled nursing facilities (SNFs) in early June for a total investment of about $10.2 million. The facilities have been consolidated into a master lease with an existing operator, Senior Management Services, with annualized rent increasing by around $1.1 million. The term of the existing master lease was extended through May 2015, followed by two renewal options of 10 years each.
The company also reported the purchase of five SNFs, three in Ohio and two in Pennsylvania for about $49 million. The facilities will be operated by subsidiaries of CommuniCare Health Services, an Omega lessee. Omega reported that the annual increase totals $5.1 million.
On June 30, the company sold four Illinois SNFs to subsidiaries of Alden Management Services, which previously leased the facilities from Omega, for about $17.4 million. Omega received net $12.7 million in cash, plus a promissory note of about $5.4 million. The sale resulted in a non-cash accounting loss to Omega of around $4.2 million.
On June 23, a $1 million deposit related to an agreement to sell a SNF in Florida was received into escrow. The purchase price of the facility is $14.5 million. The closing is scheduled for on or before Sept. 30.
Omega also reported closing on about $59.2 million of new investments with two existing operators.
As of June 30, the company owned or held mortgages on 216 skilled nursing and assisted living facilities with about 22,407 beds, in 28 states, operated by 38 third-party healthcare operating companies.