Espicom View: Biosensors International is rapidly emerging as a leader in the global coronary stent market. This deal opens the personalised medicine door for the company in this very competitive arena, and will allow Biosensors to extend the reach of its technology both geographically and through more application protocols. The acquired assets and the joint venture in further non-cardiology applications will likely build on Biosensors' last two years of growth, and will help towards the company's aim of diversification.
Biosensors International, which develops, manufactures and markets medical devices for interventional cardiology and critical care procedures, has entered into an agreement to acquire the assets of Spectrum Dynamics. Founded in 2004, Spectrum is a privately-held medical imaging and clinical applications company that has developed innovative technology providing high-speed, high-resolution functional 3D images to help physicians determine the most appropriate treatment for patients. Spectrum's D-SPECT cardiac imaging system lays the foundation for its next-generation cardiac clinical protocols that will provide new diagnostic information and treatment strategies to interventional cardiologists.
US- and Israel-based Spectrum has more than 70 issued and pending patents. The company is ISO-certified and its products have been approved for sale in major markets including the US, Japan, Europe and Canada. Additional approvals in other key markets are pending. Biosensors' Interventional Cardiology division is focused on the development, manufacture and commercialisation of drug-eluting stents, bare-metal stents and angioplasty catheters, and the company's Critical Care Products division develops and manufactures vascular catheters, pressure monitoring kits, arterial blood sampling kits and blood pressure transducers for use in open-heart surgery and critical care areas of the hospital.
The deal consideration is approximately US$51 million, with potential earn-out payments upon fulfilling certain performance criteria. Under the terms of the deal, the two companies will also create a joint venture aimed at developing future non-cardiac applications. Biosensors, which has corporate offices in Switzerland and Singapore, expects the transaction to have minimal impact on its 2014 fiscal year financial results, with the potential to be moderately accretive to its earnings in the 2015 fiscal year.
Shlomo Ben-Haim, co-founder and chairman of Spectrum, noted that: "...the synergy created as a result of this deal will provide us with meaningful resources to better realise the potential of our business...By combining the sales forces of the two companies, Biosensors can provide extensive coverage and leverage their excellent relationships with key potential customers in order to drive the use of Spectrum Dynamics' technology worldwide."
Biosensors' CEO, Dr Jack Wang, added: "We will build on Spectrum Dynamics' initial success, as it has huge potential to expand both in new geographical locations and in various application protocols. We believe these innovative applications can offer patients more advanced treatments and, at the same time, help physicians and hospitals reduce the time and money they need to spend on making accurate diagnoses...This acquisition is in line with our strategic objective to expand our product offerings. It also reflects our commitment to continue diversifying our business as we take our company to the next level."
Biosensors is in a strong position; the company noted in its 2011/2012 annual report that fiscal year 2012 was a year of dynamic and remarkable growth as the company achieved record gains in the group's revenues and profits. Not only did Biosensors manage to achieve its operational targets, but the company also successfully increased its market value, re-organised its businesses and laid critical foundations from which to execute future expansion plans. Product revenue increase was driven by Biosensors' BioMatrix range of drug-eluting stents. In its latest financial update, with figures up to 31st December 2012, product revenue for the third quarter and for the nine months ending 31st December were above those for the previous year.