Masimo Adds to Patient Monitoring Business with Phasein Purchase

Masimo Adds to Patient Monitoring Business with Phasein Purchase

Masimo Corporation, a provider of non-invasive monitoring technologies, has completed the
acquisition of Stockholm, Sweden-based Phasein AB. Phasein manufactures ultra-compact mainstream and sidestream capnography, multi-gas analyzers, and handheld solutions for capnometry—the monitoring of the concentration or partial pressure of carbon dioxide (CO2) in respiratory gases.

Phasein will complement Masimo’s patient monitoring portfolio of products ranging from OEM solutions for external “plug-in-and-measure” gas analyzers and integrated modules to handheld devices. With Phasein’s technology, Masimo now has the capability to monitor CO2, nitrous oxide (N2O), oxygen (O2), and anesthetic agents in hospital environments such as operating rooms, procedural sedations and intensive care units, according to company officials.

“We are confident the best technology always wins if clinicians are given the choice,” said Joe Kiani, Masimo chairman and CEO. “Phasein has developed infrared multispectral technologies for measuring respiratory gases. In our assessment, Phasein has the most accurate gas measurements, the widest array of measurements, and the technology most suited for easy and flexible integration in both Masimo and OEM products. Phasein’s list of OEM customers and innovative technology portfolio for monitoring CO2, N2O, O2, and anesthetic agents is a perfect addition to Masimo’s mission to take non-invasive patient monitoring to new sites and applications. We see multi-gas measurements as a half billion-dollar global market opportunity and are proud to welcome the Phasein team to the Masimo team.”

Phasein CEO Robert Zyzanski will remain in his position.

“Masimo’s pursuit of innovation for the betterment of patient care is bar none,” Zyzanski said. “The opportunity to become part of Masimo is yet another validation of our advanced capnography and gas monitoring technologies. We look forward to continuing to develop industry-leading solutions with our new colleagues as we strive to leverage the synergies of our complementary technologies to improve patient outcomes and reduce the cost of care worldwide.”

The deal was valued at approximately $30.4 million, which Masimo paid in cash. No other terms were disclosed.

The deal has had an impact on Masimo’s estimated 2012 financial results, which were disclosed in its second quarter earnings report. Masimo now expects total revenue of approximately $494 million, including $466 million in product revenue and $28 million in royalty revenue. This compares to prior guidance of $458 million in product revenue and $28 million in royalty revenue. In addition, Masimo updated its guidance for the rest of 2012 to reflect slightly lower product gross profit margin expectations, a slightly higher effective tax rate and the inclusion of first half 2012 foreign exchange losses. The impact of these revisions to guidance is offset by the 3-cent tax benefit the company recognized in the second quarter of 2012. As a result of the acquisition and the other assumptions noted above, the company now expects 2012 generally accepted accounting principles earnings per share to be approximately $1.11, compared to prior guidance of approximately $1.15.

Masimo was founded in 1989 in Kiani’s garage. Now based in Irvine, Calif., the company produces non-invasive patient monitoring technologies that include medical devices and various sensors.

Medifocus Buys Prolieve Back from Boston Scientific
Medifocus Inc. has completed the purchase of all Prolieve business assets from Natick, Mass.-based Boston Scientific Corp. Prolieve is a U.S. Food and Drug Administration-approved treatment for benign prostatic hyperplasia (BPH), which is caused by the enlargement of the male prostate gland and affects more than 50 percent of men older than the age of 50. The symptoms of BPH range from weak urinary stream and frequent urgency to the total inability to urinate.

Prolieve is a patent protected device that uses intra-cavitary catheters to deliver a combination of microwave heating and balloon dilatation of the prostatic urethra, designed to relieve BPH symptoms. Treatment with Prolieve is a minimally invasive non-surgical in-office procedure that offers patients clinically documented immediate reduction of BPH symptom scores. Prolieve is the only microwave device to be randomized to drug therapy during its pivotal trial. According to Medifocus, the BPH drug market is valued at $8 billion and growing. The Prolieve treatment also is available to physicians using a nationwide mobile service provider, Rocky Mountain Mobile Services, which was part of the asset purchase.

Prolieve was developed by Celsion Corp.—a company that develops cancer treatments—and Boston Scientific acquired the device in 2007. In 2008, following a $2 million acquisition, Celsion became a wholly owned subsidiary of Medifocus, merging management teams and assets. Brining Prolieve to Medifocus puts the technology back in the hands of those who developed it.

The acquisition—whose terms were not disclosed—gives Medifocus total control over all Prolieve hardware inventories as well as the intellectual property portfolio associated with the device. The device design is based on a platform technology from which other disposable microwave heating catheters for other deep-seated anatomical sites also can be developed.

“The purchase of the Prolieve business assets is a significant business enhancement event for Medifocus,” said Augustine Y. Cheung, Ph.D., founder, president and CEO of Medifocus. “With Prolieve, Medifocus now transforms from a development stage cancer treatment medical device company to a mature medical treatment systems and devices company with a revenue-generating commercial product for treatment of BPH and an innovative focused-heat breast cancer treatment system in advanced Phase III clinical development. Using the Prolieve technology platform and the APA focused-heat platform, the Company is well positioned to develop a rich pipeline of minimally invasive and side effect-free focused-heat treatment systems and devices for cancer and other diseases.”

Medifocus is based in Columbia, Md. The company develops and commercializes minimally invasive, focused-heat tumor-targeted cancer treatment devices and systems.

Boston Scientific provides technology in the cardiology, endoscopy, urology, women’s health and neuromodulation sectors.

Becker & Associates Consulting Acquired by NSF International
NSF International, an independent global public health and safety organization that develops standards, tests, and certifies products for the food, water, health and consumer products industries, has acquired Becker & Associates Consulting Inc., a clinical, regulatory and scientific consulting firm that specializes in U.S. Food and Drug Administration (FDA)-regulated industries, specifically medical devices, pharmaceuticals and biologics.

Terms of the deal were not disclosed.

Becker will become part of NSF’s Health Sciences Division, which offers training and education, consulting, good manufacturing practice and good laboratory practice testing, certification, research and development and auditing services for the pharmaceutical, dietary supplement and medical device industries throughout the entire product lifecycle.

“The partnership between NSF International and Becker comes at a time when the U.S. FDA is actively warning manufacturers and patients about the need for enhanced systems to ensure the safety of medical devices and pharmaceuticals,” said Ron Ginor, M.D., CEO of Becker & Associates Consulting. “With NSF’s role at the forefront of public health for 68 years and its global capabilities, we will be able to enhance and expand the scope and range of services we can offer to our customers.”

Ginor will continue in his role as CEO following the acquisition. President of Becker Consulting and former Director of Compliance at FDA’s Center for Devices and Radiological Health Ron Johnson also will continue his leadership of quality systems and compliance activities for the firm, directing the company’s expanding activities in North America, India, China and South America.

“The medical device and pharmaceutical sectors are in a period of flux following a number of significant regulatory changes,” Johnson said. “As part of NSF’s Health Sciences Division, we are able to help our clients not only meet FDA compliance but to educate their professionals to stay in compliance by leveraging the vast experience and resources of NSF International.”

Headquartered in Washington, D.C., Becker Consulting provides services to help client companies meet FDA requirements for developing, testing and marketing healthcare products. The company specializes in resolving clinical, regulatory and scientific challenges in the life sciences sector. The company also helps assure the safety and efficacy of drugs and medical devices, re-establishes manufacturing facilities after natural disasters, designs manufacturing processes for complex biologics, builds systems for protecting blood banks, and develops testing protocols and clinical programs for the evaluation of drugs and devices.

The acquisition will complement Ann Arbor, Mich.-based NSF’s services, which include training and education for the pharmaceutical, biotech and medical device industries; consulting in quality systems, GMP and compliance/enforcement actions; clinical and regulatory consulting; analytical testing; bioanalytical testing for clinical trials; and product testing and certification.

“This is a singular opportunity for both NSF International and Becker to expand our global biotech, medical device and life science services,” said Kevan P. Lawlor, president and CEO of NSF International.

Sound Interventions Posts Early Data from Hypertension Trial
Stony Brook, N.Y.-based Sound Interventions Inc. has released three months’ worth of data from the company’s first-in-human clinical study, Sound-ITV, to treat resistant hypertension through the use of catheter-based ultrasound.

Hypertension is the medical term for high blood pressure. According to a report published by The American Heart Association in 2008, the exact prevalence of resistant hypertension is unknown. Clinical trials, however, suggest that it is not rare, involving perhaps 20 to 30 percent of study participants.

In the Sound-ITV trial, participants underwent office-based blood pressure measurements and 24 hour ambulatory blood pressure monitoring (ABPM) before the ultrasonic renal denervation procedure, and subsequently three months after the procedure. The office-based blood pressure measurement results showed an average decrease of -25.6/-12.5 mm Hg (millimeters of mercury). Consistent with these results, the 24-hour mean blood pressure decreased by -23.1/-11.9 mm Hg.

According to a company spokesperson, other existing studies have been unable to replicate the Sound-ITV trial’s lowered blood pressure results. Round-the-clock measurements essentially monitor subjects while they are awake, sleeping and doing normal every day activities, a method that removes the potential for human error in an office-based measurement.

“The use of 24-hour monitoring to assess results of renal denervation procedures is a more accurate measurement of effectiveness than office-based blood pressure,” agreed Vivek Reddy, M.D., of Mt. Sinai Medical Center in New York, N.Y., an advisor on the trial and a Sound Interventions equity holder. “The favorable results seen on the ABPM fortify our confidence in the efficacy of this technology.”

Patients were treated at Holmolka Hospital in Prague, Czech Republic. Patients enrolled in the study were selected based on a history of hypertension that could not be controlled with medical therapy. The Sound-ITV study was designed to evaluate the safety and effectiveness of the company’s volumetric dosimetry-controlled application of unfocused ultrasound.

“These results demonstrate the ability of Sound Interventions’ ultrasound technology to significantly lower blood pressure in patients whose blood pressure was unable to be controlled by conventional pharmaceutical therapy,” said Petr Neuzil, M.D., chairman of the department of cardiology at Holmolka Hospital.

“Prior to initiation of the Sound-ITV study, the company performed extensive in-vitro and in-vivo testing in order to perfect the ultrasound dosimetry,” explained David Smith, president and CEO of Sound Interventions. “The pre-clinical testing has demonstrated that the Sound Interventions technology is unique in its ability to ablate the target nerve fibers while sparing the arterial wall. The success of the acute procedures in the Sound-ITV Study, along with these very strong clinical results validate this research and indicate that we are well on the way to developing state-of-the-art renal denervation technology.”

Full results from the study are expected in October.

Founded in 2010, Sound Interventions is an emerging medical technology company that develops therapeutic ultrasound to treat resistant hypertension.

Teleflex to Acquire LMA and the Firm’s Line of Laryngeal Masks
Teleflex has signed an agreement to purchase Singapore-based LMA International NV for 343.5 million Singapore dollars in cash, which at current exchange rates is approximately $276 million (U.S.). LMA makes anesthesia-related and emergency care devices; its main products are laryngeal masks—emergency airway management devices inserted into the pharynx when a patient is under anesthesia or otherwise in need of emergency airway management.

The proposed acquisition will expand Teleflex’s anesthesia franchise, and potentially position the company well in the laryngeal masks market. LMA reported revenue of $123.9 million (U.S.) in its latest fiscal year ended Dec. 31, 2011.

Incorporated in Curaçao in 1998, LMA is listed on the main board of the Singapore Exchange. LMA has offices in Jersey, Channel Islands and Singapore, as well as wholly owned manufacturing facilities in Utah and Malaysia, and subsidiaries with direct selling functions in the United States, Canada, Australia, New Zealand, Germany, Italy and Singapore.

The board of directors at both companies approved the purchase, which now is subject to LMA shareholder approval and other closing conditions.

Teleflex also has signed definitive agreements with shareholders of Intavent Direct Limited and affiliates to acquire their LMA-branded laryngeal mask supraglottic airway business and certain other products in the United Kingdom, Ireland and Channel Islands. The business reported revenue of $8.2 million in its latest fiscal year.

Collectively, the transactions are expected to be accretive to Teleflex’s adjusted earnings per share by approximately 3 cents to 4 cents in fiscal 2012, and 35 cents to 40 cents in fiscal 2013, excluding non-recurring purchase accounting items and other acquisition and integration related costs.

“These acquisitions will be complementary to Teleflex’s current anesthesia and respiratory businesses, creating a stronger, more diversified business segment with more than $530 million in combined annual sales,” said Benson Smith, chairman, president and CEO of Teleflex. “The addition of these businesses significantly strengthens and expands our global anesthesia product portfolio, providing opportunities with respect to key clinical United States and international call points, while also further strengthening our group purchasing organization relationships.”

Both transactions are expected to close in the fourth quarter of this year.

Based in Limerick, Pa., Teleflex produces products for the critical care market.