Medical Device Link.

Originally Published MX November/December 2005

MILESTONES

ArthroCare Corp. (Austin, TX) has purchased the business and assets of Applied Therapeutics Inc. (Tampa, FL), which produces wound-care products for ear, nose, and throat (ENT) applications, for $10 million in cash and a contingent payment based on Applied Therapeutics' net revenue between February 1, 2006, and January 31, 2007. In relation to the acquisition, ArthroCare is formalizing a new, larger credit facility. "We are excited about the purchase of Applied Therapeutics' product line, which we have direct experience distributing in selected territories," said Ron Underwood, vice president and general manager for ArthroCare ENT. "This experience gives us confidence that these products successfully address a large, growing market need and are compatible with and complementary to our rapidly growing, core coblation business."

Bramer

MedVenture Technology Corp. (Louisville, KY), a manufacturer of minimally invasive medical devices, plans to relocate its operations and corporate headquarters to a new 85,000-square-foot facility in Jeffersonville, IN, nine miles from its current 55,000-square-foot location. "We are very excited about this opportunity and have been continually impressed with the strong interest shown in MedVenture and its clients by the state of Indiana and the city of Jeffersonville," said Kevin Bramer, president of MedVenture. In addition to the construction of the new facility, scheduled for completion in late summer 2006, the company has entered into a partnership with Purdue University in regard to continuing education, workforce development, and R&D synergies, including support of the university's center for advanced manufacturing.

NuVasive Inc. (San Diego, CA), a developer of surgical treatments for spine disorders, has acquired assets and technology from Pearsalls Ltd. (Taunton, UK), a subsidiary of AMI Holdings Inc., which is a platform company of RoundTable Healthcare Partners (Lake Forest, IL). Included among the acquired assets are the Neodisc, a cervical nucleus-like replacement device, and all Pearsalls' intellectual property related to embroidery technology for use in surgical implants. NuVasive reports the Neodisc could be commercially available in Europe by 2007 and in the United States around 2010. The transaction required a closing payment of $12 million, with additional milestone payments leading to FDA approval, as well as 5% royalty payments on sales of Neodisc. "Having a product that is a first-option device that preserves motion and can be fully revised to any other cervical procedure is a significant advancement in cervical spine surgery technology," said Alexis V. Lukianov, chairman and CEO of NuVasive. "It allows patients seeking treatment for a degenerated cervical disc to fill the gap between presurgical treatment and either spine fusion or TDR (total disc replacement), providing us broader access to a cervical motion preservation market that has been forecasted to exceed $1 billion by 2011."

The board of directors of Dade Behring (Deerfield, IL) has approved a two-for-one stock split and the company's second cash dividend. "The decision to split the stock reflects Dade Behring's significant growth in market value and our belief that we will continue to create value for shareholders," said Jim Reid-Anderson, Dade Behring's chairman, president, and CEO.

St. Jude Medical Inc. (St. Paul, MN) in August announced its first patient enrollment in its resynchronization therapy in normal QRS clinical trial, designed to evaluate the safety and efficacy of cardiac resynchronization therapy in certain heart failure patients who currently do not qualify for device therapy. Earlier that month, the company reported that FDA approved its SJM Biocor and Biocor Supra family of stented tissue valves, its first such product in the U.S. market.

Cyberkinetics Neurotechnology Systems Inc. (Foxborough, MA) has started a new pilot clinical study of the BrainGate neural interface system, a brain-computer interface, in individuals with amyotrophic lateral sclerosis or other progressive motor neuron diseases. Another study is also under way in patients with severe paralysis resulting from spinal cord injury or muscular dystrophy, or with "locked in" syndrome secondary to stroke.

Bunes

Recom Managed Systems (Greenville, SC) has entered a proposed joint venture with TZ Medical Inc. (Portland, OR) to create a new line of catheters that will incorporate TZ's line of intracardiac catheters and Recom's signal-amplification and noise-reduction technologies. "We will continue to identify opportunities like this joint venture with TZ Medical to expand the use of our technology in areas with significant growth and revenue potential to create value for Recom's shareholders," said Pamela Bunes, president and CEO of Recom.

Privately held Arbor Surgical Technologies Inc. (Irvine, CA), a device manufacturer focused on the heart-valve-replacement market, reported in late August that it had closed a $20 million Series B financing event. This latest cash infusion brings the total private equity investment in Arbor to $34 million.

New Leaf Venture Partners (New York City and Menlo Park, CA), a venture capital firm dedicated to life sciences, has closed a $310 million venture capital fund. The company reports it plans to invest in firms focused on clinical-stage biopharmaceutical products, early-stage medical devices, and molecular diagnostics.

Cross

Medical device manufacturer dj Orthopedics Inc. (San Diego), which specializes in rehabilitation and regeneration products for the nonoperative orthopedic and spine markets, has purchased the orthopedic soft goods (OSG) business assets of Encore Medical Corp. (Austin, TX) for about $10 million in cash. Dj Orthopedics estimates the acquired line, which includes orthopedic soft goods, patient safety products, and pressure care products, will add annual net revenue of about $10 million to $12 million to its business. "This is a perfect example of an accretive tuck-in acquisition for dj Orthopedics' rehabilitation business," said Les Cross, dj president and CEO.

Medtronic Inc. (Minneapolis) has entered into a royalty-bearing, nonexclusive patent cross-licensing agreement with NeuroPace Inc. (Mountain View, CA), a private device manufacturer specializing in the detection, treatment, and monitoring of epilepsy and other neurological diseases. "The agreement allows Medtronic to further develop and expand its innovative portfolio of therapies for patients suffering from neurological diseases, with the most immediate application in sensing and treating refractory epilepsy," said Jon Tremmel, president of Medtronic Neurological.

Cheatham

Toshiba America Medical Systems Inc. (Tustin, CA), in conjunction with Columbus Children's Hospital (Columbus, OH), has unveiled the Infinix cardiac biplane flat-panel diagnostic imaging x-ray system, which was installed first in a new pediatric unit at the hospital. The system is the result of a multiyear collaboration between Toshiba and John Cheatham, MD, director of cardiac catheterization and interventional therapy at the hospital's heart center.

Mtm laboratories AG (Heidelberg, Germany), which develops in vitro diagnostic tests for cancer, has announced the incorporation of a U.S. subsidiary, mtm laboratories Inc., in Westborough, MA. The subsidiary will focus on the business development and marketing of the company's products in the United States. Robert Silverman, who provided strategic management consulting services to mtm, will serve as president.

Harvard Bioscience Inc. (Holliston, MA) has announced plans to divest its capital equipment business. The company reported, prior to its second-quarter earnings release, that the capital equipment business fell short of its expectations during the period.

PolyMedica Corp. (Woburn, MA) has agreed to acquire National Diabetic Pharmacies Inc. (Salem, VA), a provider of diabetes and disease-management products, for an estimated $55 million. "This transaction represents an important strategic step by the company to expand into the commercial market," said Patrick Ryan, PolyMedica president and CEO. "National Diabetic Pharmacies has a strong healthcare professional sales force that will allow Liberty [Diabetes, a PolyMedica division,] to begin selling directly to healthcare professionals."

AtriCure Inc. (West Chester, OH), a manufacturer of surgical tissue-ablation devices, in August announced the pricing of $12 per share for its initial public offering of 4 million shares of common stock.

John B. Nano, former president and CEO of technology transfer and licensing provider Competitive Technologies Inc. (Fairfield, CT), has filed suit against the company. The lawsuit alleges Competitive Technologies denied him certain severance benefits when it terminated him in June. The company denies the suit's allegations and reports that it intends to "vigorously defend" its interests.

NovoStent Corp. (Mountain View, CA), which is developing an anchored helical stent technology for a range of vascular therapies, has closed its second round of financing, adding $3.1 million for a total of $12.75 million.

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