A Medical Device Daily
Women's health company Cytyc (Marlborough, Massachusetts) reported that it has closed on the acquisition of privately held Proxima Therapeutics (Alpharetta, Georgia), a company that develops radiation delivery systems for the treatment of cancer. The acquisition closed on Monday.
The two companies disclosed last month (Medical Device Daily, Feb. 11, 2005) that they had entered into a definitive merger agreement for Cytc to acquire Proxima for a purchase price of $160 million, plus a two-year earn-out based on incremental sales growth in breast-related products, to be paid out of existing cash.
Proxima's lead product, the MammoSite radiation therapy system, is a single-use device for the treatment of breast cancer that positions radiation sources directly into the post-lumpectomy site to optimize radiation treatment delivery while minimizing damage to healthy tissue.
Proxima launched the MammoSite RTS following FDA clearance in May 2002. The company reports, to date, more than 7,000 breast cancer patients treated with the system. The Centers for Medicare & Medicaid Services (Baltimore) last year approved new reimbursement codes for the Mammosite treatment (MDD, April 13, 2004).
"The acquisition of Proxima Therapeutics represents another significant milestone for Cytyc and we are very excited to further expand our innovative product offerings to include breast cancer treatment," said Patrick Sullivan, Cytyc's chairman, president and CEO.
At the time the deal was announced, Sullivan characterized Proxima as "an exciting company that continues our expansion into a diversified women's health company." He said that Proxima's technologies serve key unmet medical needs and that its products "continue our relationships with breast surgeons and breast centers."
Cytyc acquired Novacept (Palo Alto, California) a year ago (MDD, March 2, 2004/ March 29, 2004). That acquisition, valued at $325 million, added the NovaSure Impedance Controlled Endometrial Ablation System to Cytyc's product offerings and led to the development of Cytyc Surgical Products as a wholly owned subsidiary.
Cytyc refers to its ThinPrep System as "the most widely used method" for cervical cancer screening in the U.S. The ThinPrep System consists of the ThinPrep 2000 Processor, ThinPrep 3000 Processor, ThinPrep Imaging System, and related reagents, filters and other supplies.
ThinPrep also provides the platform for the company's launch into breast cancer risk assessment with the FirstCyte Breast Test.
Fisher Scientific International (Hampton, New Hampshire) reported that it has signed a definitive agreement to sell Atos Medical (Horby, Sweden), a manufacturer of ear, nose and throat medical devices with 2004 sales totaling $35 million, to Nordic Capital for $110 million in cash.
Acquired by Fisher in its 2003 transaction with Perbio Science (Stockholm, Sweden), Atos provides devices designed to rehabilitate the voice and pulmonary functions after laryngectomy for the treatment of cancer. Atos also provides other devices for the treatment of ear and sinus diseases.
The transaction, which is subject to customary closing conditions, is expected to be completed by the beginning of the second quarter.
In other dealmaking news:
• National Surgical Care (NSC; Chicago), which partners with physicians and hospitals to operate ambulatory surgery centers across the country, reported that it has acquired Aspen Healthcare (Boulder, Colorado), a surgery center management and development company. Terms were not disclosed.
In the past 15 months, NSC has acquired six multi-specialty surgery centers in Maryland, Texas, Florida, Nevada and California. The acquisition of Aspen provides NSC with increased operations infrastructure and additional resources in developing surgery centers. Combined, NSC will operate 23 surgery centers.
Founded by Tom Yerden in 1992, Aspen manages hospital-physician joint ventures and physician-owned surgery centers. It was previously majority-owned by TLC Vision (Mississauga, Ontario).
Yerden will serve as NSC's chief development officer. Rick Pence, who has been with NSC since its inception, will assume the role of chief operating officer.
• Tenet Healthcare (Dallas) reported that several of its subsidiaries have completed the previously disclosed sale of four acute-care hospitals in Orange County, California, to Integrated Healthcare Holdings (IHH; Costa Mesa, California).
The four hospitals to be acquired are 282-bed Western Medical Center (Santa Ana); 188-bed Western Medical Center (Anaheim); 114-bed Chapman Medical Center (Orange) and 178-bed Coastal Communities Hospital (Santa Ana). Together these hospitals represent 12.1% of all hospital beds in Orange County.
Dan Brothman, former CEO of Western Medical Center, will become senior vice president of IHH, with oversight responsibility for all four hospitals. The remaining CEOs of all four hospitals will remain in their current positions. IHH said it does not anticipate any significant changes or reductions in staffing at any of the four hospitals.
Net after-tax proceeds, including the liquidation of working capital, are expected to be about $80 million. Tenet said it expects to use the proceeds of the sale for general corporate purposes.
The four hospitals are among 27 hospitals Tenet reported in January 2004 that it was planning to divest. With the completion of this latest deal, Tenet has completed the divestiture of 22 of the 27 facilities. Discussions and negotiations with potential buyers for the remaining five hospitals slated for divestiture are ongoing.
Tenet, through its subsidiaries, owns and operates acute-care hospitals and related healthcare services.
IHH is a predominantly physician-owned management company created to provide high-quality healthcare through the acquisition and management of financially distressed or poorly performing healthcare facilities.