A Diagnostics & Imaging Week

Eastman Kodak (Rochester, New York) reported entering into an agreement to acquire Orex Computed Radiography (Yokneam, Israel), a provider of compact computed radiography (CR) systems enabling the acquisition of patient X-ray images digitally, for about $50.5 million in cash.

Kodak said it expects Orex to add roughly $32 million to its 2005 revenue, reflecting about 10 months of Kodak ownership. The company anticipates the acquisition will be earnings neutral in 2005 and accretive thereafter. Orex's 2004 revenue was about $28 million.

The technology behind the hardware and software that make up Orex's small-format CR products have resulted in flexible compact systems for specialty markets, such as orthopedics, diagnostic imaging centers and dentistry. The company's systems also are used for in-room computed radiography needs throughout a medical facility such as in emergency, pediatrics and intensive care departments enabling medical staff to stay in contact with patients during the exam.

Orex reports to date almost 4,000 of its systems installed in the U.S., Europe, Japan, China and other parts of the world, with some 250 CR units sold to branches of the U.S. military.

The company has U.S. offices in Auburndale, Massachusetts.

Dan Kerpelman, president of Kodak's Health Imaging Group, said, the purchase "is in strategic alignment with plans to market our digital medical imaging and information products to customers in specialty medical markets worldwide. By augmenting our own highly successful CR product line, we can provide a broader array of CR solutions to meet the needs of large and small practices alike."

Marketing of Orex systems now will be supported by Kodak's resources.

"Kodak has the customer focus, the breadth of digital image capture, PACs and print solutions, an excellent track record in CR systems and the global resources to further enhance and better serve Orex existing and new customers in specialty markets like no one else can," said Hillel Bachrach, president and CEO of Orex. Computed radiography systems from Orex also are used by customers in another market Kodak serves industrial non-destructive testing organizations, such as pipeline companies, foundries and aerospace manufacturers offering industrial radiographers an easy digital solution to make image viewing and analysis more efficient.

Orex was founded in 1996 as Digident, with a focus on developing innovative CR solutions for general dental and orthodontist practices. In 2000, the company was renamed Orex Computerized Radiography to address medical applications for D-CR. Kodak's Health Imaging Group develops intelligent imaging products from analog to digital.

The agreement, subject to various standard approvals, is expected to close by the end of the first quarter.

Varian Medical Systems (Palo Alto, California) reported acquiring Sigma Micro Informatique Conseil (Toulose, France), a private supplier of information management software for medical imaging and radiation oncology in cancer clinics and hospitals in France and other European nations, for about $13 million in cash.

Christopher Hanna, vice president for Varian's Oncology Information Systems business, called the purchase "a logical extension of Varian's product line that enables us to offer customers a more comprehensive information management solution, particularly in international markets . . . we believe the Sigma Micro will serve as an excellent complement to our more fully-featured VARiS Vision software for information and image management within integrated Varian treatment networks." It also adds development resources to Varian's Oncology Information Systems team, he said.

Hanna said Sigma Micro software has more than 90 installed systems, mostly in France with the balance in Europe, Asia and North Africa.

The acquisition enables Varian to provide French-speaking and other international clinics and hospitals with technology for managing and maintaining electronic health records for cancer patients receiving radiotherapy and/or chemotherapy. The Sigma Micro software supports billing in a variety of reimbursement schemes and works with equipment from multiple vendors, including Varian.

Sigma Micro General Manager Pierre Fragnac, PhD, one of the company's founders, said, "By being a part of Varian, we have the strongest possible platform for developing, marketing, servicing and supporting our technology."

Sigma Micro has 19 employees who will continue in their present roles, working from the Toulouse facility.

Varian said it expects the acquisition to add annualized revenues of about $7 million and be neutral to earnings in the current fiscal year.

Varian is a leading manufacturer of integrated cancer therapy systems and a supplier of X-ray tubes and flat-panel digital subsystems for imaging in medical, scientific and industrial applications.

In other dealmaking news, Corgenix Medical (Westminster, Colorado) last Friday reported that because of a lack of progress in completing merger-related financing of $6 million, and the expiration of key dates within a plan of merger, it has terminated its planned merger with Genesis Bioventures (Surrey, British Columbia), first rolled out in 2003.

Douglass Simpson, president of Corgenix, said he regretted the move "after spending so much time and energy on it. Both companies have been working very hard over the past 18 months to complete this merger." He added: "[W]e continue to advance [Corgenix's] core medical diagnostics business while exploring financing and strategic opportunities as they are presented."

When the merger proposal was announced, the companies said the expanded firm would focus on the development of a breast cancer risk assessment product as well as expansion of Corgenix's immunoassays for the assessment of coagulation, vascular, liver and autoimmune diseases.

Corgenix said its anti-phospholipid test is the first FDA-cleared assay for anti-Cardiolipin. The company is focused on developing diagnostic kits for various immunology disorders, vascular diseases and bone and joint disorders.

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