A Medical Device Daily
ProRhythm (formerly known as Transurgical; Setauket, New York), a manufacturer of medical devices for the treatment of atrial fibrillation (AF), reported entering into a number of agreements with St. Jude Medical (St. Paul, Minnesota), providing, under certain conditions, for St. Jude to make two $12.5 million minority investments in ProRhythm, which the company anticipates will occur in 2005.
The agreements also provide that St. Jude has the exclusive right to acquire ProRhythm for $125 million in cash, with additional cash payments payable to the ProRhythm shareholders after completion of an acquisition if ProRhythm achieves certain milestones.
St. Jude said it is not obligated to exercise this acquisition right, which extends to March 31, 2007. In addition, the two companies have agreed to collaborate on the continuing development of ProRhythm's catheter-based, high-intensity focused ultrasound (HIFU) ablation system for the treatment of AF.
St. Jude also obtained distribution rights for ProRhythm's HIFU ablation system in the European Union. CE-marking is expected in the first half of 2005.
St. Jude will provide clinical research support services during ProRhythm's U.S. investigational device exemption pivotal trial, and the companies have agreed to a master research agreement providing an overall structure for collaboration on subsequent R&D.
And St. Jude will provide OEM manufacturing services to ProRhythm for a portion of the company's products.
The agreements are subject to ProRhythm stockholders' approval.
Reinhard Warnking, president and CEO of ProRhythm, said, “We have long been convinced that HIFU is the ideal energy for the treatment of atrial fibrillation. This investment by St. Jude signifies their ongoing commitment to HIFU, and to the treatment of atrial fibrillation. Our clinical trials in Europe and the U.S. have indicated that our HIFU Ablation System may play a significant role in the catheter-based treatment of this disease.“
He added: “St. Jude has made significant investments in the treatment of atrial fibrillation by forming a separate division dedicated to addressing this significant unmet medical need. I am excited by the potential that is created with the combination of the two organizations strengths. I am optimistic that this partnership will rapidly commercialize our HIFU system, and serve to establish HIFU ablation as the first choice for catheter-based treatment of atrial fibrillation.“
The AF ablation procedure, commonly called pulmonary vein isolation, uses ProRhythm's balloon catheter, which is inserted through a vein in the leg and advanced into the left atrium of the heart. Controlled, discrete ablation lesions around the pulmonary veins, created with the HIFU catheter, are intended to prevent unwanted electrical impulses from disrupting the heart's normal rhythm. Unlike other energy forms used for this procedure, HIFU energy is focused within the myocardium, and holds the potential to reduce unwanted side effects of the procedure such as the formation of thrombus and stroke.
ProRhythm, since 1997, has been developing HIFU to advance the minimally invasive treatment of complex medical conditions. Its HIFU system is currently under investigation in clinical trials in Europe and the U.S. to treat AF.
In other financing activity:
• Blood substitute developer Biopure (Cambridge, Massachusetts) reported obtaining commitments from institutional and individual investors to purchase about $11.3 million of its common stock for anticipated net proceeds of about $10.4 million. Biopure expects to sell 22.2 million shares of its common stock at 51 cents a share, with the offering expected to close Jan. 10.
The shares will be issued under a shelf registration statement previously filed with and declared effective by the Securities and Exchange Commission. C.E. Unterberg, Towbin acted as the agent for the offering.
Biopure said that under its current plan it believes that its cash on hand, including the net proceeds of this offering, should fund operations into January 2006.
Biopure is developing its investigational oxygen therapeutic Hemopure [hemoglobin glutamer - 250 (bovine)] for a potential cardiovascular ischemia indication and, in collaboration with the U.S. Naval Medical Research Center, for a trauma indication. As part of those efforts, the company is conducting two Phase II clinical trials, one in Europe and one in South Africa, replying to questions from the FDA, conducting preclinical animal studies and maintaining some manufacturing capability.
Biopure manufactures intravenously administered pharmaceuticals, called oxygen therapeutics.
• Gen-Probe (San Diego) has licensed from Corixa (Seattle, Washington) the rights to develop molecular diagnostic tests for roughly 50 potential genetic markers in the areas of prostate, ovarian, cervical, kidney, lung and colon cancer, the companies reported.
Gen-Probe gains access to certain Corixa intellectual property covering multiple genetic sequences related to potential markers for various cancers. These markers include AMACR for prostate and colon cancers, CA125 for ovarian cancer, and L523S for cervical and lung cancers. In exchange, Gen-Probe will pay Corixa a $1.6 million initial access fee, and another $3.2 million in two equal access fees in January of 2006 and 2007, unless Gen-Probe terminates the agreement.
Gen-Probe also will pay Corixa up to $2 million on a product-by-product basis if certain regulatory and commercial milestones are achieved. In addition, Gen-Probe will pay Corixa royalties on sales of any products developed using Corixa's intellectual property.
“This agreement with Corixa is a significant step forward in our long-term strategy to become a leader in cancer diagnostics,“ said Henry Nordhoff, chairman, president and CEO of Gen-Probe. “We believe the next two to three years will be a time of strong product sales growth for Gen-Probe, driven by the roll-out of the Tigris system, continued international expansion in blood screening and the U.S. approvals of our Procleix Ultrio and West Nile virus assays.“
Gen-Probe has received FDA approvals or clearances for a portfolio of products that detect a variety of infectious microorganisms, including those causing sexually transmitted diseases, tuberculosis, strep throat, pneumonia and fungal infections. In addition, Gen-Probe terms its Tigris instrument “the only fully automated, high-throughput system in the molecular diagnostics industry.“
The company also makes the only FDA-approved blood-screening assay for the simultaneous detection of HIV-1 and HCV, which is marketed by Chiron (Emeryville, California).