Obalon taps Cowen to explore ‘strategic alternatives’

Obalon TherapeuticsObalon Therapeutics (NSDQ:OBLN) today tapped an advisory firm to explore “strategic alternatives,” a week after revealing plans to cut its workforce in half.

The Carlsbad, Calif.-based company, which makes a gas-filled balloon designed to treat obesity, said April 3 that it would lay off 49 of its 100 employees, including all of its direct sales force, in a pivot toward retail.

Today the company said it hired investment bank Cowen “as an independent financial advisor to assist in exploring financial and strategic alternatives” to explore “a wide range of financial and strategic alternatives.”

“Obalon will proceed in an orderly manner to identify and evaluate possible financial and strategic alternatives for the company and their implications,” Obalon said “No assurance can be given as to whether any particular financial or strategic alternative will be recommended or undertaken, and if so, upon what terms and conditions.”

The company said it plans to stay mum until its board approves a transaction or until a statement is required by law.

OBLN shares, which plunged -21% last week after the restructuring news broke, were off by as much as -11.6% today before rallying to 58¢ apiece today in late-morning activity, down -1.0%.

Admedus deals vaccines biz to Constellation Therapeutics

AdmedusAdmedus (ASX:AHZ) said today that it agreed to sell its vaccines business to Constellation Therapeutics in a deal that will see it own nearly 30% of the Chinese company.

Other shareholders in the vaccines would own another 11%, Queensland, Australia-based Admedus said. Sun Bright Holdings will own the remainder and put in $18 million until November 2022, in five $3.6 million installments pegged to “certain milestones,” the company said. Failure to pay an installment would trigger the conversion of 12% of Constellation shares to the Admedus bloc of vaccine business shareholders. Admedus CEO Wayne Patterson is slated to become chairman of Constellation Therapeutics as part of the transaction.

Last month Admedus won CE Mark approval in the European Union for its CardioCel 3D and VascuCel products.

FTC grants final approval for Fresenius’s $2B buyout of NxStage

Fresenius Medical Care acquires NxStage Medical

The U.S. Federal Trade Commission said yesterday that it granted a final order of approval to Fresenius Medical Care (NYSE:FMS; ETR:FRE) for its $2 billion acquisition of NxStage Medical.

The approval came with a caveat that the companies divest their assets and rights to research, develop, manufacture, market and sell NxStage’s bloodline tubing sets intended for use during hemodialysis treatment.

To mollify the anti-trust regulators, NxStage last July agreed to deal its Medisystems bloodlines business to B. Braun.

The final order was approved in a three-to-two vote, according to an FTC posting.

The $30-per-share deal for the Lawrence, Mass.-based home hemodialysis pioneer, first announced in August 2017, was initially slated to close by the end of that year. But it was delayed several times by the government shutdown this year and by the FTC.

Histogenics to merge with Ocugen

Ocugen, Histogenics

Histogenics (NSDQ:HSGX) said yesterday that it inked a definitive merger agreement with Ocugen through which both companies will combine into a single publicly-traded, clinical-stage biopharmaceutical company.

The combined entity will operate under the Ocugen name, the companies said. As part of the deal, Ocugen’s shareholders will become the majority owners of Histogenics outstanding common stock upon the closure of the merger.

Read the whole story on our sister site, Drug Delivery Business News

Novartis completes spinout of Alcon eye biz

Novartis AlconNovartis (NYSE:NVS) closed the spinout of its Alcon vision care business, setting the stage for its shares to begin trading today in Switzerland and New York.

The spinout, announced last June, saw each Novartis shareholder receive a single ALC share for every five NVS shares as of the close of business April 1, Novartis said last month.

“For more than 70 years, Alcon has been dedicated to helping people see brilliantly and now, as an independent company, we are pursuing even more opportunities to further that mission,” CEO David Endicott said in prepared remarks. “We are poised to achieve sustainable growth and create long-term shareholder value as a standalone company. We have a long history of industry firsts and, as a nimble medical device company, we are sharply focused on providing innovative products that meet the needs of our customers, patients and consumers.”

Alcon’s share of the roughly $23 billion vision market was 30.9% last year at $7.1 billion, with surgical revenues up 7% to $4.0 billion and vision care sales up 3% to $3.1 billion compared with 2017, the Geneva-based company said.

Novartis bought Alcon in 2010 after a years-long courtship.

Final defendant sentenced in insider trading case

Federal prosecutors have wrapped up an insider trading case based on alleged tips from a Bank of America consultant on pending corporate transactions, including Abbott‘s (NYSE:ABT) $25 billion acquisition of St. Jude Medical.

Rodolfo Sablon, 39, of Miami, Fla., was sentenced Friday to six months in prison for his role in the insider trading scheme based on tips from Bank of America technical consultant Daniel Rivas. U.S. District Judge Alison Nathan also sentenced Sablon to two years of supervised release, including six months in a community confinement center, and ordered him to pay $923,566 in forfeiture and a $5,000 fine. Sablon pleaded guilty in July 2018 to conspiracy to commit securities fraud and fraud.

In August 2017, U.S. authorities accused seven individuals of reaping more than $5 million in illicit profits based on tips from Daniel Rivas. Prosecutors said that childhood friends Rivas and Roberto Rodriguez conspired to trade on confidential information and colluded with Sablon, Rodriguez’s friend and roommate, to create an investment fund using proceeds from the inside trades with an ownership stake going to Rivas.

Rodriguez pleaded guilty in September 2018 to conspiracy to commit securities fraud and fraud in connection with a tender offer and was sentenced to one year and one day in prison, according to federal prosecutors. Michael Siva pleaded guilty in October 2018 to one count of conspiracy to commit securities fraud and fraud and was sentenced to 18 months in prison. Jhonatan Zoquier pleaded guilty in August 2018 to conspiracy to commit securities fraud and was sentenced to three months in prison. Jeffrey Rogiers pleaded guilty in August 2018 to conspiracy to commit securities fraud and was sentenced to three months in prison. The scheme brought in some $2 million in illegal profits, according to prosecutors. In all, tips from Rivas led to about $5 million in illegal gains, they said.

“Today’s sentencing of Rodolfo Sablon closes the book on this multimillion-dollar, multi-pronged insider trading scheme,” U.S. Attorney Geoffrey Berman said in a prepared statement. “Sablon and his co-defendants acted as though the securities laws that are designed to keep our nation’s marketplace fair did not apply to them. However, as they all have learned, our office is committed to identifying and prosecuting these types of insider trading networks.”

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Seisa Medical acquires stent & delivery system maker Burpee MedSystems

Seisa Medical

Seisa Medical said today that it acquired stent and delivery device manufacturer Burpee MedSystems for an undisclosed amount.

New Jersey-based Burpee MedSystems was founded in 1998 and uses laser machining, surface finishing, nitinol forming and shaping and welding to create stents and delivery systems, El Paso, Texas-based Seisa Medical said.

“We are thrilled to be joining Seisa as it gives Burpee MedSystems the global infrastructure we’ve been aiming for to expand our offerings and capabilities to the market,” Burpee MedSystems CEO Janet Burpee said in a prepared statement.

Janet and co-founder Steve Burpee will continue to support Burpee MedSystems and will retain majority ownership of medical device incubator and holding company Tinker Med, which was previously wholly owned by Burpee MedSystems.

Seisa said that it funded the transaction through its $52 million senior secured credit facility, and added that it is actively pursuing prudent and accretive acquisitions.

“This acquisition demonstrates Seisa’s commitment to investing in vertical capabilities to create end-to-end solutions that deliver value to our customers. The marriage between Seisa’s high-volume production of FDA Class II and Class III devices with Burpee MedSystems’ mastery in the manufacture of complex stents, delivery systems, and components will provide a scalable one-stop-shop for customers focused on the high-growth markets for implantable stents and their delivery systems. We are excited to welcome the Burpee team to Seisa. Together we offer not only a compelling offering for strategic outsourcing solutions in the medical device market, but also provide all our employees more opportunities globally as well,” Seisa founder & CEO Julio Chiu said in a press release.

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Catapult, Smithwise slated to merge

Medical device development firms Catapult Product Development and Smithwise have agreed to merge.

Founded in 2012, Catapult is a full-service medical device development firm, specializing in console-based diagnostic and therapeutic systems, minimally-invasive surgical and diagnostic tools, and an array of portable and handheld medical equipment. The Waltham, Mass.-based company works extensively with startups to enable their core technologies, and with established device manufacturers and academic centers as they accelerate device development projects toward commercialization.

Get the full story on our sister site, Medical Design & Outsourcing.

Natus Medical deals Medix division to employees

Natus Medical

Natus Medical (NSDQ:BABY) said yesterday that it inked a deal to sell its subsidiary Medix Medical Devices in an employee-led buyout.

In the sale, Pleasanton, Calif.-based Natus Medical said it is offloading the Medix line of products including incubators and warmers.

Natus said that Medix will continue to distribute the Medix products as well as the previously distributed line of Natus products and other third party products in Argentina and Venezuela. The separated Medix will also provide customer service, sales, customer support and warranty and repair services for the products.

“This divestiture is an important step toward refocusing our business on our core products and investing in the markets we expect to grow in the future. We remain committed to the markets we serve, and will ensure a smooth and orderly transition for our customers and employees,” prez & CEO Jonathan Kennedy said in a press release.

Medix posted $7.6 million in revenue last year and was expected to add $6 million to Natus’s revenue this year.

Natus said that it expects the divestiture to be accretive to its operating income margin going forward, with $3 million to $4 million in expenses related to the sale.

Johnson & Johnson closes Auris Health buyout, sterilization biz sale

Johnson & Johnson

Johnson & Johnson (NYSE:JNJ) said yesterday that its Ethicon biz completed its $3.4 billion acquisition of robotic surgery dev Auris Health and the $2.8 billion divestiture of its Advanced Sterilization Products to Fortive (NTSE:FTV).

Redwood City, Calif.-based Auris Health, which was created by Intuitive Surgical (NSDQ:ISRG) founder and surgical robotics pioneer Dr. Fred Moll, developed and produces the robotic Monarch platform which has FDA clearance for diagnostic and therapeutic bronchoscopic procedures.

The Monarch system features a controller interface for navigating the integrated flexible robotic endoscope into the periphery of the lung and combines traditional endoscopic views with computer-assisted navigation based on 3D patient models, the company said.

J&J said that Auris’s platform will complement technologies it currently has in development with Verb Surgical for robotic general surgery and the orthopedic platform it obtained when it acquired Orthotaxy.

“We are focused on building a connected, data-driven digital ecosystem that pairs our market-leading surgical solutions with advanced technologies to improve the patient experience. The passionate team and differentiated innovation from Auris will help us amplify the power of digital surgery to address unmet clinical needs and lead a transformation in surgical care and lung cancer intervention,” J&J medical devices worldwide chair Ashley McEvoy said in a press release.

In a separate announcement, the company also said it sold its Advanced Sterilization Products biz to Fortive for a total of $2.8 billion, with $2.7 billion in cash from Fortive and $100 million in retained net receivables. J&J said that the ASP biz had a net revenue of approximately $800 million last year.

The ASP division includes capital, consumables and software for use in low-temperature terminal sterilization and high-level disinfection of reusable surgical instruments, the company said in a press release.

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