QLT (Vancouver, British Columbia) reported that it will purchase all outstanding shares for ForSight Lab’s(Menlo Park, California) second spin-out company, ForSight Newco II, for $42 million and turn it into a subsidiary.

The deal will include future milestone payments and royalties on net product sales. The milestone payments will consist of a one-time $5 million payment upon the initiation of a Phase III clinical trial for the first product, $20 million on first commercialization of each of the first two products using ForSight Newco II’s proprietary technology, and $15 million on first commercialization of each subsequent product.

The acquisition is expected to close early in 4Q07.

“ForSight Newco II is just under a year old. It is very unusual for us to sell a company this early,” Robin Bellas of Morgenthaler Ventures, one of the lead investors for the company, told Medical Device Daily.

Perhaps the leading factor behind QLT’s reason for the purchase was to acquire ForSight Newco’s proprietary ocular punctal plug delivery system, a system both companies tout as able to replace eye drop treatments for glaucoma patients.

Punctal plugs are a non-invasive drug delivery system, capable of delivering a variety of drugs to the eye over time through controlled release to the tear film. (The term “puncta” refers to the opening of the tear ducts on the eyelid margin, thus providing the name for devices inserted into that area.)

Bob Butchofsky, president/CEO of QLT, said during a conference call to discuss the acquisition, “We plan on taking this model to the next level and hope to reduce or eliminate the need for eye drops in a number of chronic ocular diseases.”

Currently, ForSight has plans for a submission to the FDA seeking an investigational device exemption by the first quarter of next year. The company will then implement a Phase I and Phase II clinical trials centered on the plugs treating glaucoma patients in the first half of 2008. The punctal plugs could garner market approval by the 2012.

Sustained punctal plugs, ForSight says, could replace eye drops for glaucoma, dry eye, allergies and postoperative care, which represent a $6 billion market.

But both companies have acknowledged potential issues with punctal plugs in the past, with The Eye Digest web site reporting that 40% of these plugs are lost within six months of insertion.

“The major concern with current punctual plugs is retention,” Butchofsky said. “Plugs tend to fall out and while retention rates continue to improve with new plug designs, clearly the current markets size for punctal plugs don’t provide an incentive to make a meaningful investment. But we think that with the significant improvements in plug and drug elution technology in the last few years, that this is an idea whose time has come.”

Neither ForSight nor QLT would comment on specifics surrounding how they would improve these retention rates.

“I view this as a team effort between the two companies, “ Angela Macfarlane, president/CEO of ForSight Labs told MDD. “It will help address a market pool of patients that suffer from glaucoma.”

QLT recently sold the U.S. rights to its Bema drug delivery technology to BioDelivery Sciences International (BDSI; Morrisville, North Carolina) that BDSI had initially licensed from QLT USA. (MDD, Sept. 11, 2007).

ForSight Labs focuses on developing devices for visually impaired patients. QLT is a global biopharmaceutical company.

In other dealmaking activity:

• NuVasive (San Diego), a company focused on developing products for minimally disruptive surgical treatments for the spine, reported that it has licensed its “insert and rotate” method technology to Theken Spine (Akron, Ohio). Theken was granted a non-exclusive license to use NuVasive’s patented “insert and rotate” method, U.S. Patent No. 6,290,724, in exchange for royalty payments to NuVasive.

The patented “insert and rotate” method is a means of inserting a device between adjacent vertebrae and then rotating the device for the purpose of separating and stabilizing those vertebrae.

Commenting on the agreement, Alexis Lukianov, CEO and chairman, said, “We view this license arrangement as a solid validation of our unique and growing intellectual property platform. We commend Theken Spine for their cooperation in working to conclude this agreement.”

NuVasive develops devices for the surgical treatment of spine disorders.

• RadNet (Los Angeles), a provider of diagnostic imaging services through a network of owned and operated outpatient centers, yesterday reported that it has acquired Liberty Pacific Imaging Center (Encino, California) for $2.8 million.

The center operates an MRI practice using a 3T MRI unit, the strongest magnet strength commercially available at this time, the center said. The center was founded in 2003, and has since been a fixture in the Encino/Tarzana market of the San Fernando Valley in Los Angeles.

RadNet said the acquisition allows it to consolidate a portion of its Encino/Tarzana MRI volume onto the existing Liberty Pacific scanner. This consolidation will make available RadNet’s existing 3T MRI unit in that market, which will be moved to RadNet’s Squadron facility in Rockland County, New York.

Additionally, RadNet will add a 64-slice PET/CT unit to the Liberty Pacific center, which will create increased capacity for its expanding PET/CT business in this market. Furthermore, the installation of the 64-slice PET/CT technology will enable RadNet to effectively perform certain specialized cardiovascular imaging, which has gained increased clinical and third-party payor support in recent months.

• QMed (Eatontown, New Jersey) reported that it has extended its agreement with a health plan customer for an additional three years. QMed will continue to provide its interventions for stroke and coronary heart disease. In addition, the company receives a bonus of $550,000 for having achieved specific quality and financial performance measures.

Jane Murray, QMed president/CEO, said, “We are obviously gratified to continue our relationship with this health plan. Just as importantly, and consistent with our historical experience, our interventions have shown positive health and financial outcomes in both commercial and Medicare populations.”