Medical Device Daily

Wound care products maker AcryMed (Portland) said it is being acquired by I-Flow (Lake Forest, California) in a $25 million deal. AcryMed made med-tech headlines in November, when a rise in Methicillin-resistant Staphylococcus aureus or the (MRSA) “superbug” infections dominated media outlets.

At the time, the company touted its Silvagard product, a composition made up of silver nanoparticles formed chemically in a solution and then used to coat medical devices, as able to prevent infection in hospitals (Medical Device Daily, Nov. 15, 2007). Silver is known to arrest the spread and development of bacteria.

“We are going to stay where we are, with the same staff and the same building” said AcryMed CEO Jack McMaken.

I-Flow sells drug delivery technology, including a line of compact, portable infusion pumps, catheters and pain kits that administer local anesthetics directly to the wound site or near a nerve. It also manufactures a line of disposable infusion pumps used to administer chemotherapies, antibiotics and other medications.

As a subsidiary of I-Flow, AcryMed will manufacture a new line of silver transparent wound dressings, which I-Flow said it expects to bring to market next year. In addition to providing silver coating for these I-Flow products, AcryMed will also conduct R&D for commercialization of new wound care technologies.

The deal is set for completion in early 2008. AcyrMed holds 66 worldwide issued and pending patents, including 16 U.S. patents.

As part of the acquisition, I-Flow said that Bruce Gibbins, AcryMed’s founder, chief technology officer and chairman, and McMaken, will enter into full-time employment agreements with I-Flow.

AcryMed in 2007 was ranked the 20th-largest bioscience company in Oregon by the Portland Business Journal. It employs about 45 workers.

At the end of 2006, I-Flow reported an operating loss of $7.8 million on revenue of $93.5 million, compared with an operating loss of $16.3 million on revenue of $72.1 million for 2005.

NeuroMetrix (Waltham, Massachusetts), a developer of products used to diagnose and treat diseases of the nervous system, neurovascular disorders and pain, reported that it has acquired substantially all of the assets of EyeTel Imaging (Columbia, Maryland), including certain liabilities.

The price consisted of 1,050,295 newly issued shares of common stock of NeuroMetrix, with a value of about $9.9 million as of the closing of the acquisition, and $175,000 in cash.

NeuroMetrix originally obtained an exclusive license to sell EyeTel’s DigiScope to the physician office market in October 2006 and has been marketing the product since early 2007.

NeuroMetrix will own all EyeTel intellectual property, including an exclusive worldwide license with Johns Hopkins University (Baltimore) for the DigiScope. The acquisition secures all commercialization rights to the DigiScope, including the physician office market and an expanded opportunity in the eye specialist market, comprised primarily of vision centers supervised by optometrists. The acquisition will provide an opportunity to improve the gross margins realized by NeuroMetrix on sales of the DigiScope, it said.

The DigiScope is based on patented technology developed at the Wilmer Eye Institute of Johns Hopkins and sold under an exclusive licensing agreement with Johns Hopkins. The DigiScope is an FDA-cleared device used for the early detection of diabetic retinopathy and other eye diseases. The device works by capturing digital images of a patient’s retina through a dilated pupil and sending images via the internet to the EyeTel Reading Center. The center then processes the images and sends the results to the physician within two business days.

About 20 EyeTel employees and consultants will transition to NeuroMetrix.

Shai Gozani, MD, PhD, NeuroMetrix president/CEO, said termed the acquisition “consistent with the long-term vision of our company. The DigiScope represents an important diagnostic tool for physicians and optometrists [enabling] them to increase compliance with annual eye exams among patients with diabetes. This effort to detect diabetic retinopathy in physician offices and vision centers addresses a critical need among patients with diabetes and has the potential to help reduce diabetes related blindness through earlier detection.”

He said, “We have been marketing the DigiScope for nearly a year and believe that this product represents a very good fit with our neurotechnology oriented clinical mission and within our product development and sales and marketing organizations... . We believe that office-based assessments of retinal and optic nerve pathology represent a significant market opportunity.”

In other dealmaking activity:

• Nyer (Bangor, Maine) reported an agreement with the minority shareholders of its subsidiary, D.A.W. (d/b/a Eaton Apothecary;Topsfield, Massachusetts) to acquire the remaining 20% interest in the pharmacy chain in fulfillment of Nyer’s obligation pursuant to a 1996 shareholder agreement.

By agreeing to a series of transactions, the minority shareholders will immediately assume management of Nyer and control about 58% of the voting power of Nyer. As conditions of the buyout are met, all preferred shares of the company will be retired.

The agreement also calls for Nyer to simultaneously acquire 100% of its outstanding shares of Class A and B preferred stock owned by Samuel Nyer in exchange for a $400,000 promissory note bearing interest at a rate of 7% per year, maturing in five years. And the minority shareholders of D.A.W. have agreed to purchase 597,827 shares of Nyer common stock for $1.84 a share.

The change of control caused by these transactions is subject to Nyer shareholder approval and other conditions.

Karen Wright, president of Nyer, said, “We are excited we have reached an agreement to purchase the remaining 20% of our pharmacy segment, D.A.W., and will have employment contracts with our five executive pharmacy managers. This is an important time for the company as we strive to increase profitability and increase shareholder value.”

Nyer is a holding company that distributes and markets medical equipment and supply products to hospitals, physicians and nursing homes using telemarketing, direct sales personnel, catalogs and the Internet.