Angiotech Pharmaceuticals (Vancouver, British Columbia), a provider of drug coatings for stents and other medical devices, closed its acquisition of NeuColl (Los Gatos, California) in an all-cash transaction of nearly $13 million. Angiotech had obtained an equity interest in NeuColl through the acquisition of Cohesion Technologies in January 2003. Angiotech said that NeuColl "will form one of the cornerstones" for its orthopedic biomaterials franchise. NeuColl's initial product platform is a synthetic bone graft substitute comprised of collagen, a composite material of hydroxyapatite and tricalcium phosphate. Its lead products are the Collagraft and Neugraft bone graft matrixes. These synthetic biomaterials avoid the need for a second operative site and the associated trauma of harvesting the patient's own bone (autograft).

Bacterin International (Belgrade, Montana), a maker of elutive bioactive coatings for medical devices, has signed a memorandum of understanding to purchase the assets of U.S. Tissue Center (Salt Lake City), a supplier of spinal, skin and traditional grafts. U.S. Tissue Center, a spinout of the University of Utah (also Salt Lake City), is an accredited tissue bank that has contracts with hospitals, research centers and orthopedic device manufacturers nationwide to supply spinal and bone allografts and tissue for surgical procedures and research. Bacterin has filed with the Securities and Exchange Commission to register as a public company.

The Cooper Companies (Lake Forest, California) and Ocular Sciences (Concord, California) reported signing an agreement for Cooper to acquire Ocular in a stock-and-cash merger valued at $1.2 billion. At closing, Cooper will pay about $600 million in cash and issue about 10.3 million shares of its common stock to Ocular Sciences stockholders and option holders. The estimated $1.2 billion deal value represents a premium of more than 17% to the July 27 closing price of Ocular, Cooper said. The transaction is expected to close in the first quarter of Cooper's 2005 fiscal year, beginning Nov. 1. The Cooper Companies' CooperVision unit (also Lake Forest), the world's fourth-largest contact lens manufacturer, is a supplier of specialty lenses. Ocular Sciences, the fifth-largest global contact lens manufacturer, supplies primarily spherical and daily disposable contact lenses. With the combination, CooperVision will become the world's third-largest contact lens company, according to Cooper, leapfrogging Bausch & Lomb (Rochester, New York).

Encore Medical (Austin, Texas) said it has agreed to acquire privately held Empi (St. Paul, Minnesota), a company focused on products used for pain management, orthopedic rehabilitation and physical therapy. The transaction is valued at about $360 million, consisting of $325 million in cash and 8 million shares of Encore common stock. Empi's majority shareholder, The Carlyle Group, will own about 12% of Encore Medical after closing and will be Encore's second-largest shareholder behind Galen Partners, which owns about 19% of the company. This transaction, expected to close by October, will more than double the size of Encore Medical and position the combined company as a major provider of orthopedic medical products. Encore Medical makes orthopedic devices, sports medicine equipment and related products for the orthopedic industry.

RITA Medical Systems (Mountain View, California) has completed its $129 million acquisition of Horizon Medical Products (Manchester, Georgia). Horizon shareholders received 0.4212 newly issued shares of RITA common stock for each share of Horizon common stock held. RITA develops products for cancer patients including radio frequency ablation systems for treating cancerous tumors as well as percutaneous vascular and spinal access systems.

St. Jude Medical (St. Paul, Minnesota) reported that it plans to acquire Irvine Biomedical (IBI; Irvine, California), a private company developing electrophysiology (EP) catheter products used to diagnose and treat cardiac arrhythmias. IBI's products are distributed by St. Jude in Japan, and as a result of St. Jude's April 2003 acquisition of Getz Bros. (Tokyo), the company assumed a 14% ownership position in IBI that Getz had acquired in 1997. To acquire the remaining 86% of IBI's capital stock that it does not already own, St. Jude expects to pay $47 million at deal close. The purchase agreement includes milestone incentives of up to $13 million to the non-St. Jude Medical shareholders if IBI receives approval, by specified dates, from the FDA of certain EP ablation systems in development.

Stryker (Kalamazoo, Michigan) reported completing its acquisition of all of the outstanding stock of SpineCore (Summit, New Jersey) for an up-front payment of $120 million in cash, financed by Stryker's existing credit facilities. Founded in 2001 by Thomas Errico, MD, and J.P. Errico, SpineCore is developing two flagship products: the FlexiCore lumbar artificial disc, and the CerviCore cervical artificial disc, neither yet FDA-cleared. Stryker said that substantially all of the up-front payment will be written off as in-process R&D costs, resulting in an after-tax charge against its 3Q04 earnings of about $120 million, or 29 cents per fully diluted share. Transaction terms also include milestone and royalty payments of up to another $240 million upon the achievement of commercialization of SpineCore's products in the U.S.

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