Medical Device Daily

China Medical Technologies (Beijing), a manufacturer of ultrasound products and in vitro diagnostic systems, reported that it will buy the fluorescent in situ hybridization (FISH) businesses of Supreme Well Investments and Molecular Diagnostics Technologies, which are British Virgin Islands-incorporated entities with operations in the U.S., Hong Kong and China for $136.8 million, with up to an additional $40 million if certain developmental milestones are met.

FISH is a type of hybridization in which a DNA probe is labeled with fluorescent dye so that it can be seen with a microscope.

China Medical said it intends to develop the FISH technology in China for the diagnosis of prenatal and postnatal disorders as well as various cancers through laboratory evaluation and analysis of bodily fluids and tissues.

Of the initial $136.8 million payment, $20 million will be held back by the company for a period to satisfy any possible claims that could arise if the sellers breach their obligations under the acquisition agreement. The company expects to close the transaction in March.

Feng Zhu, VP of China Medical, in a conference call said that FISH is used in many countries for diagnostic testing but is not yet widely deployed in China. He noted that it is commonly used for prenatal and postnatal diagnosis of genetic-based diseases, detection of the HER-2/neu gene in selecting the proper treatment therapy for breast cancer patients and the initial diagnosis and subsequent monitoring of the progression of bladder cancer.

"The Chinese government is naturally looking to introduce new, effective and affordable technologies, in particular in the field of diagnostics to address the medical needs of the general population," said Zhu. "We believe this a significant market opportunity for China Medical."

China Medical said it intends to use the FISH technology to develop and manufacture FISH products, including both FISH probes and a special microscope system used to visualize FISH probes.

Zhu said the FISH products will be focused initially on the prenatal diagnosis of congenital disorders. According to statistics from the Chinese Ministry of Health, there are more than 16 million newborn infants each year in China, and about one million new babies are born with congenital disorders.

Zhu said he believes that this creates a significant need for an accurate and quick diagnostic system to test pregnant women in China, "particularly in light of China's one family, one child policy."

"With FISH, we believe we will be well positioned to conduct prenatal testing of pregnant women in China with a leading technology that can return results in less than 24 hours as compared to the up to four weeks needed for karyotyping, the most comparable alternative [currently used in China]," said Xiaodong Wu, CEO and chairman of the company. "This technology should also enable accurate diagnosis of some of the most significant disorders at a competitive cost."

The company said it also intends to apply the FISH technology to other diagnostic uses, including the diagnosis of cervical, breast, bladder and other major cancers.

"Acquiring the FISH technology will further strengthen our leading position in diagnostic testing in China by adding a portfolio of proprietary tests for the detection of chromosomal and gene abnormalities. With the addition of FISH technology, we believe we will be able to effectively develop specialized testing products with high specificity and sensitivity using molecular diagnostics. We expect this to complement our existing broader diagnostic tests that use ECLIA technology."

Credit Suisse Securities acted as financial advisor and Morrison & Foerster acted as legal counsel to China Medical

In other dealmaking news:

• GE Healthcare (Little Chalfont, UK) reported that it has completed a license agreement with Applied Biosystems (AB; Foster City, California), granting it access to GE Healthcare patents for the biomagnetic isolation of nucleic acids.

The license, which is valid for the lifetime of the patents, grants AB certain rights with respect to the isolation and purification of nucleic acids using GE Healthcare's magnetic separation technology.

GE Healthcare said its patented methods for magnetic separation offer "significant advantages" over conventional techniques for the isolation and purification of biomolecules such as DNA and RNA from laboratory and clinical samples. Benefits include greater yields of product and elimination of clogging associated with filter-based methods

"This license recognizes the considerable value that our biomagnetic isolation technology brings to genomics researchers" said Eric Roman, general manager, Genomic Sciences, GE Healthcare. "We are pleased to grant Applied Biosystems access to our patents in this area, which will allow them to use our proprietary magnetic separation protocols in conjunction with their MagMax range of products for nucleic acid isolation"

Financial terms were not disclosed.

• The acquisition of Rhodia's (Courbevoie, France) global silicones business by China National BlueStar (Cranbury, New Jersey), was finalized on Jan. 31, creating a new $700 million silicones-focused entity called Bluestar Silicones.

Financial terms of the deal were not disclosed.

The acquisition involves all silicone-related business activities, products, employees and manufacturing assets, including two production sites in North America located in Rock Hill, South Carolina and Ventura, California.

Bluestar Silicones combines BlueStar's upstream Silicon metal operations and capacity with Rhodia's downstream silicone market and applications expertise.

The combination of two upstream production facilities located in Roussillon, France, and Xinguo, China, offers 400,000 tons of capacity for silicones core intermediates. Bluestar Silicones' Xinguo site represents the largest available production capacity for core silicones intermediates in China, it said.

Olivier de Clermont-Tonnerre, former Rhodia Silicones president, will serve as CEO of Bluestar Silicones. The global business will be headquartered in Lyon, France.

North American operations will be led by J. Christopher York, who has been named president, Bluestar Silicones North America.

Bluestar Silicone's products are used in specialty elastomers, paper and textiles coatings, and dental and healthcare applications.