A Medical Device Daily

Conor Medsystems (Menlo Park, California) reported that the U.S. Federal Trade Commission has granted early termination of the Hart-Scott-Rodino waiting period for its acquisition by Johnson & Johnson (New Brunswick, New Jersey) and a wholly owned subsidiary of J&J.

The transaction remains subject to other customary closing conditions, including approval of the transaction by Conor stockholders.

Conor said the transaction is expected to close as promptly as possible after the satisfaction of those conditions and a special meeting of Conor stockholders, scheduled for Jan. 31.

Conor develops controlled vascular drug delivery technologies, and has primarily focused on the development of drug-eluting stents to treat coronary artery disease.

In other dealmaking activity:

• Physician Oncology Services (Atlanta) reported that it intends to build “a preeminent provider of outpatient radiation oncology care in the U.S.”

Backed by Oak Hill Capital Partners (Oak Hill), Physician Oncology said that it acquired a controlling interest in Radiotherapy Clinics of Georgia (RCOG; Atlanta) to serve as a platform for growth in its strategy to partner with radiation oncology centers and physicians. Terms were not disclosed.

RCOG is a provider of outpatient radiation oncology services, saying it is the largest provider of radiation therapy in Georgia, with seven locations in Atlanta. It is led by 13 board-certified radiation oncologists.

Physician Oncology will be headed by Louis Stripling. Dr. Frank Critz, founder/medical director of RCOG, will continue as medical director and be an owner of Physician Oncology.

RCOG is a Center of Excellence for prostate cancer treatment and research, having treated more than 10,000 men since its inception.

Oak Hill Capital Partners is a private equity firm with more than $4.6 billion of capital from entrepreneurs, endowments, foundations, corporations, pension funds and global financial institutions.

• Spinal implant developer RSB Spine (RSB; Cleveland) reported the repurchase of a right of first refusal for its InterPlate spine implant platform from NuVasive (San Diego). The right of first refusal was included in the sale of RSB’s SmartPlate cervical plate technology to NuVasive in June 2005. Repurchase terms were not disclosed.

John Redmond, president/CEO of RSB, said, “We believe the InterPlate platform will be more attractive to parties potentially interested in acquiring the technology now that this hurdle has been removed. The right of first refusal limited our flexibility in structuring commercialization agreements.”

NuVasive retains the right of first refusal for other RSB technologies.

The InterPlate was approved by the FDA as a vertebral body replacement/partial vertebral body in August 2006. Variations of the device for other indications are under development.

• Medical Properties Trust (MPT; Birmingham, Alabama) reported that it will sell all of its interests in the real estate of Houston Town and Country Hospital and Medical Office Building to Memorial Hermann Healthcare System, the largest hospital operator in the Houston area.

The sale is expected to close before the end of January, subject to customary closing conditions.

MPT said the transaction will result in a gain to it in FY07 “in an amount sufficient to substantially offset costs incurred in 2006 and to be incurred in 2007 associated with the previously reported termination of the original tenant’s leases of the facilities.” Separately, the lease termination will result in a non-cash charge in 2006 of about $1.5 million for rent accruals that would have been paid between 2007 and 2020 with the terms of the original leases.

Edward Aldag Jr., MPT’s president/CEO and chairman, said. “We have repossessed a $65 million hospital and medical office building, released it to a highly experienced operator for a short period and recovered all of our investment, including working capital loans, with what appears to be very limited financial impact. The fact that Memorial Hermann was willing to act very quickly and accept terms that provided such a positive outcome for us further demonstrates the high quality and desirability of our hospital assets.”

• Xcorporeal (Los Angeles) and National Quality Care (NQC; Beverly Hills, California) are continuing their battle, with Xcorporeal, developer of the Wearable Artificial Kidney, filing a report containing its prior notices to NQC concerning breaches of their merger agreement of Sept. 1, 2006, terminated by NQCI Dec. 29 (Medical Device Daily, Jan. 5, 2007); Xcorporeal agreed to the termination on Jan. 2.

NQCI signed an exclusive license agreement with Xcorporeal on Sept. 1, 2006, under which Xcorporeal has continued the development of the underlying technology. NQC separately entered into a merger with Xcorporeal on Sept. 1, 2006, subject to due diligence.

Xcorporeal alleges that NQC’s CEO led negotiations with Xcorporeal and made representations ultimately found to be false. It also charged that NQCI failed to engage qualified financial and regulatory officers, failed to adopt a quality system procedure that met FDA standards, and failed to adopt required financial disclosure controls. It said NQC had numerous problems with its business operations and failed to report its real financial condition.

Xcorporeal said it was surprised by subsequent filings made by NQCI on Dec. 29.

Xcorporeal said it continues to develop the technology acquired from NQCI under their license agreement.