A Medical Device Daily

Urological device maker American Medical Systems Holdings (AMS; Minnetonka, Minnesota) reported that it has agreed to acquire Ovion (San Mateo, California), a company focused on the development of a transcervical sterilization technology not yet approved for sale.

The transaction is made up of a $10 million initial payment, potential clinical trial and regulatory milestone payments of $20 million and a contingent payment equal to net sales for a 12-month period after commercialization.

The founders of Ovion will receive a 2% royalty related to their initial technology contribution to the company. Closing of the transaction is subject to customary conditions and a right of first refusal held by Conceptus (Redwood City, California), a right Conceptus obtained in a previous intellectual property settlement with Ovion.

Martin Emerson, president and CEO of AMS, said, “As women around the world increasingly seek permanent contraception alternatives, the Ovion technology promises greater comfort for the patient and convenience for the physician.” The company estimated more than 700,000 surgical tubal ligation procedures are performed in the U.S. annually.

The Ovion technology allows a physician to place occlusion devices in the fallopian tubes through an incision-less transcervical approach guided by hysteroscopy. The Ovion system of implants and delivery tools are designed specifically for use in the physician’s office.

Prior to any one-time charges for in process R&D, the transaction is not expected to effect previous 2005 earnings guidance of 64 cents to 67 cents a share for the year, AMS said. It said it anticipates revenues from this technology beginning in 2008, so the previously communicated 2005 revenue guidance of $260 to $265 million remains unchanged.

Assuming completion of all final requirements, the deal is expected to close in the third quarter.

AMS developes devices and procedures for applications to treat erectile dysfunction, benign prostatic hyperplasia, incontinence, menorrhagia, prolapse and other pelvic disorders.

In other dealmaking news:

• IRIS International (Chatsworth, California) reported that it has closed its previously reported purchase by its subsidiary IRIS Deutschland (Mainz-Mombach, Germany) of the urinalysis business of Quidel (San Diego) for $500,000 in cash.

Cesar Garcia, president and CEO of IRIS, said, “The acquisition of the UrinQuick Semi-Automated Urine Chemistry Analyzer and related technology, including UrinCheck consumable test strips, opens a new market for IRIS that will complement our family of fully automated IQ200 urine microscopy analyzers.” He said that integration of the business is on schedule “and we look forward to growing and enhancing our new urine chemistry business.”

The UrinQuick is described as a semi-automated benchtop instrument for rapid analysis that will be offered to IRIS’ international customers, except those in Japan. IRIS said it already has reciprocal distribution agreement for urine chemistry and microscopy analyzers covering the U.S. and Japan with its Japanese partner, Arkray.

IRIS is focused on developing automated urinalysis technology with systems placed in major medical institutions throughout the world. Its newest-generation system is the iQ200 Automated Urine Microscopy Analyzer, utilizing image flow cytometry, particle recognition designed to reduce the cost and time reuired in manual microscopic analysis.

• Argonaut Technologies (Redwood City, California) reported the close of the sale of the assets of its chemistry consumables business and certain assets of its process chemistry business, except for its cash, to Biotage (Uppsala, Sweden).

With the transaction, Argonaut said it no longer has an operating business and will “wind up” its assets and liabilities. Argonaut has been a provider of consumables, instruments, and services for drug discovery and development.

Argonaut in March reported an amended agreement with Biotage to set an increased purchase price of $21.2 million in cash and to include the sale of certain assets and the assumption of specified liabilities, including warranty service and maintenance, and accounts payable of up to $350,000 associated with its remaining process development products and services (Medical Device Daily, March 22, 2005).

Departing the organization are Lissa Goldenstein, president and CEO; David Foster, senior vice president and CFO; and Jeffrey Labadie, senior vice president, chemistry consumables group. Gordon Tredger, Argonaut’s senior vice president, instrumentation and integration, has been promoted to president and will manage its closing activities.

Goldenstein said that she, Foster and Labadie will remain available to assist Tredger with the transition, and Goldenstein will remain on Argonaut’s board.