Deals Shaping the Medical Industry (04/1995)

Summarizing the deals in the medical industry.

ACQUISITIONS

Healthcare Technologies Inc.

Orgenics Ltd.

Healthcare Technologies(infectious disease rapid diagnostics) intends to merge with Orgenics (Israel-based, infectious disease diagnostics) with Healthcare Technologies’ shareholders owning 60% of the merged entity. (Apr.)

Orgenics had $7.7 million in revenues in fiscal 1994, of which over half came from sales in Europe, particularly France. The company is in advanced stages of development of point-of-care tests for AIDS, hepatitis, and chlamydia. Investment Banks/Advisors: Evergreen Capital Markets (Healthcare Technologies Inc.).

JOINT ARRANGEMENTS

Abbott Laboratories

Physician Sales & Service Inc.

Physician Sales & Service(medical supplies, equipment and pharmaceuticals distributor) has signed a long-term agreement to exclusively distribute several of Abbott Laboratories’ diagnostic products to the physician’s office market in the US. (Mar.)

Abbott has also agreed to acquire 275,000 shares of PPS common stock (a 4% stake). Among the products included in the agreement are the Cell Dyn1400, 1600, and 1700 hematology products, Abbott Vision, IMx, and the Abbott Testpack line of rapid tests. Sales of these products in the US market were over $100 million last year. Abbott will continue to maintain a specialized physician’s office sales force and provide current levels of service and technical support for the physician’s office market.

Astra/Merck Group

ChemTrak Inc.

Astra Merck(cardiovascular and gastrointestinal pharmaceuticals) has licensed exclusive US marketing rights to ChemTrak’s development stage blood test for detecting Helicobacter pylori. (Mar.)

Astra Merck has rights to market the test to the professional markets and to over-the-counter retail outlets. It also has rights to sub-license marketing rights to other companies. ChemTrak will receive payments at milestones leading to the commercialization of the product. The company expects to complete product development by mid-1995, conduct clinical studies, and apply for FDA approval to market the test to the physician’s office market first. ChemTrak believes the OTC version of the H. pylori test will be similar in use to its AccuMetercholesterol self-test. Astra Merck hopes to boost sales of its proton-pump inhibitor Prilosec, which it believes to be more effective than H2 antagonists in treating ulcers.

BioQuant Inc.

Metra Biosystems Inc.

BioQuant(saliva and sweat-based tests for osteoporosis and monitoring glucose levels) will evaluate the utility of Metra Biosystems’ biochemical markers in measuring pyridinium crosslinks excreted through perspiration. (Mar.)

Pyridinium crosslinks are byproducts released in urine when bone is resorbed or degraded, a possible indication of osteoporosis. BioQuant will evaluate if Metra’s technology can assess metabolic change in perspiration. The BioQuant product utilizes a skin patch which is worn for 3-5 days and then mailed to BioQuant’s laboratory for analysis.

Block Drug Co. Inc.

Zila Inc.

Block Drug Co.has licensed exclusive European and Australian marketing rights to Zila’s OraScan oral cancer diagnostic. (Mar.)

OraScanincorporates a series of oral rinse solutions to enhance the visualization of abnormal tissue. Zila will receive initial license fees and additional funds and royalties keyed to sales in each of the countries included in the agreement.

Chiron Corp.

Genelabs Technologies Inc.

Chironand Genelabs Technologies (pharmaceutical and diagnostic products for viral and autoimmune diseases) have cross-licensed marketing rights to each other’s hepatitis diagnostic products in a deal worth potentially $24 million to Genelabs. (Mar.)

Under the agreement, Chiron has non-exclusive rights to develop and commercialize products based on the hepatitis G virus discovered by Genelabs. It is expected that Chiron will offer its diagnostic partner, Johnson & Johnsondivision Ortho Diagnostic Systems, the opportunity to co-develop and commercialize the technology as well. Genelabs and Chiron have also cross-licensed marketing rights to other hepatitis and retrovirus technologies, including Chiron’s hepatitis C, thus resolving any potential conflicts with respect to HCV intellectual property. Chiron will pay Genelabs an initial $5 million, $9 million for the development of HGV diagnostics, and $10 million in an equity investment.

Cistron Biotechnology Inc.

Techne Corp.

R&D Systems Inc.

Technedivision R&D Systems (research reagents and immunoassays) will sell Cistron Biotechnology’s recombinant interleukin-1 beta (IL-1B) protein and IL-1B precursor assays to the research market. (Mar.)

R&D Systems will also sponsor additional research by Cistron including the development of new cytokine products to be co-marketed by the partners. The companies also intend to collaborate in the development of a periodontal disease assay kit for use in dentists’ offices. The multi-year agreements are valued at approximately $2 million, of which $1 million is a license fee to be paid by R&D Systems for IL-1B.

Corange Ltd.

Boehringer Mannheim GMBH

Cortecs International Ltd.

Boehringer Mannheimwill exclusively distribute in Europe and other territories Cortec’s Helisal rapid blood test for the detection of Helicobacter pylori. The agreement runs for a minimum of ten years. (Mar.)

Cortecs has the right to parallel market the test in the UK and Australia. Boehringer will organize product registration in the territories in which it will market the product and will have first right to negotiate for other Helisalproducts. It may also make any improvements to the Helisal rapid blood test. In October 1994, BM licensed the serum-based assay for H. pylori from Cortecs. Cortecs believes it will obtain UK 19 million over the next five years from the agreement. Zenyaku Kogyo is Cortec’s exclusive Japanese distributor for the Helisal range of assays.

Corange Ltd.

Boehringer Mannheim-Diagnostics

SpectRx Inc.

Boehringer Mannheim-Diagnosticshas obtained exclusive worldwide marketing rights to a non-invasive device for detecting diabetes from SpectRx (diagnostics start-up focusing on diabetes). (Mar.)

SpectRx will manufacture the test, which is a desktop instrument that provides results in less than a minute by taking measurements in a patient’s eye with low-level, multicolored light beams. SpectRx expects its test to be marketed in late 1996 pending FDA approval.

Raggio-Italgene SPA

UroCor Inc.

Thomas Jefferson University

Thomas Jefferson Universityhas licensed exclusive rights to its new prostate cancer diagnostic test to Raggio-Italgene for Europe and Japan, and to UroCor for the US and Canada. (Mar.)

TJU’s new assessment method identifies prostate specific antigens (PSAs) in the blood. Previously scientists thought that prostate cancer metastasized from the lymph nodes to the bone, but TJU researchers believed that in some cases it goes directly to the blood. This test is able to detect small amounts of PSA in the blood of patients in the early stage of prostate cancer, as well as determine if the disease has spread. If the disease has spread the patient would have the option of hormone or radiation therapy instead of removal of the prostate. Kits are expected to hit the European market first (third quarter of 1995). DISTRIBUTORS

ACQUISITIONS

Physician Sales & Service Inc.

Winchester Surgical Supply Co.

Physician Sales & Service(distributes medical supplies, equipment, and pharmaceuticals to office-based doctors) has acquired Winchester Surgical Supply of Charlotte, NC. (Mar.)

Winchester, in business in the Carolinas for 75 years, should bring a loyal customer base to its new owner. The company makes annual sales of about $12 million. PSS will enhance Winchester’s operations by installing its Instant Customer Order Network, an order-entry system, and by setting up same-day delivery capability. Winchester’s operations will be consolidated with PSS’s four existing service centers in the Southeast (Charlotte, Raleigh, Columbia, and Norfolk). Nationwide, PSS operates 53 service centers in 48 states. PSS numbers the total US physician’s office market at 389,000 doctors practicing at 187,000 sites. LABORATORY TESTING SERVICES

ACQUISITIONS

Unilab Corp.

Medical Laboratory Network

Unilab(California-based clinical laboratory testing service) has signed a definitive agreement to acquire Medical Laboratory Network for $32.5 million--$31 million in cash and $1.5 million in Unilab common stock. (Apr.)

MLN shareholders will also receive warrants to purchase 200,000 shares of Unilab common at $6.00 per share (currently trading at around $5.00). MLN, with current annual sales of about $25 million, will strengthen Unilab’s presence in Southern California, particularly in Santa Barbara and Ventura counties. Last year Unilab acquired Pathlab, which has facilities in Northern California. PHARMACEUTICALS

ACQUISITIONS

AB Astra

Fisons PLC

Astra ABacquired the research facilities of Fisons PLC in the UK and the R&D operations in the US, for an estimated $321.2 million in cash. (Mar.)

Under the terms of the agreement, Astra will assume responsibility for outstanding capital and revenue commitments, and will acquire rights relating to compounds in the exploratory and development stage, including two compounds in full development: remacemide for epilepsy and stroke and SPL-67085for thrombosis. Fisons will retain rights to certain respiratory compounds, products, and delivery devices under development, including nedocromil sodium Tilade and sodium cromoglycate Intal, Ultrahaler and non-CFC aerosol delivery technology. Astra will have access to rights under license for non-CFC technology for the development of its own respiratory compounds. Fisons will receive royalties on net sales of products derived from patented entities in research and full development as well as products using non-CFC respiratory technology. Any products resulting from the Fisons research would be offered to the Astra Merck joint venture in the US.

patented entities in research and full development as well as products using non-CFC respiratory technology. Any products resulting from the Fisons research would be offered to the Astra Merckjoint venture in the US.

Pharmos Corp.

Oculon Corp.

The boards of both companies have agreed for Pharmos Corp.(eye and brain drugs) to acquire privately owned Oculon Corp. (anti-cataract ophthalmics). Pharmos will pay with 5.5-6 million shares of common stock (NASDAQ price pre-announcement: $0.53). (Mar.)

The number of shares will depend on Oculon’s liabilities and on the trading price of Pharmos shares on the day of the transaction. After the merger, Oculon stockholders will place one member on Pharmos’s board of directors. Pharmos remarked it is pleased to form this association with Oculon’s institutional and VC stockholders. The merger, along with recent 30% cuts in personnel and related costs, is part of Pharmos’s plan to secure its financial footing while the FDA reviews its NDA for Lotemax, an ophthalmic anti-inflammatory. The company believes the product has a superior safety profile compared to currently approved steroids. Oculon, which has raised private money five times, brings a marketed ophthalmic device and pharmaceuticals in preclinical testing. Investment Banks/Advisors: Montgomery (Pharmos Corp.).

Watson Pharmaceuticals

Circa Pharmaceutical Inc.

Copiague, Long Island-based generics firm Circa Pharmaceuticals(formerly Bolar) has agreed to become a wholly-owned subsidiary of Corona, CA-based Watson Pharmaceuticals (generics) through a stock swap valued at about $570 million. (Mar.)

Circa shareholders will receive 0.86 common Watson shares (trading at $30.75 on NASDAQ the day of the deal’s announcement; 17.8 million outstanding) for each common Circa share ($23.75 on ASE the same day; 21.7 million outstanding) held. Circa, which posted earnings of $17.3 million in 1994, derives most of its earnings from sales of the anti-Parkinson’s drug Eldepryl($125 million in 1994) through Somerset Pharmaceuticals, its 50%-owned joint venture with Mylan Laboratories; and from the 20% royalty it collects on sales of the cardiovascular drug Dilacor XR, marketed by Rhone-Poulenc Rorer. Following the merger, Watson’s board of directors will consist of five members from Watson, three from Circa, and one selected by Circa with Watson’s approval. Additionally, Circa’s CEO, Melvin Sharoky, MD, will be appointed president of Watson with Allen Chao, PhD, retaining his role as Watson’s CEO. Watson currently markets 20 generics and has seven ANDAs pending with the FDA.

JOINT ARRANGEMENTS

Alanex Corp.

AB Astra

US-based biotech Alanexentered into a three-year drug discovery collaboration with Sweden’s Astra to develop small molecule drugs using Alanex’s Alanet technology. (Mar.)

Financial terms were not disclosed, however Astra will make milestone payments determined by research and by investigational new drug and new drug applications. Alanex will use its proprietary computational and molecular design technology, Alanet, to analyze Astra’s chemical database to discover novel small molecule drugs. Alanetconsists of computer software programs that aid in the development of non-peptide drugs that mimic or inhibit the action of peptides. Alanex signed a similar deal last April with Amgen to discover and develop small molecule drugs that act through peptide receptors to treat certain neurological disorders.

American Home Products Corp.

Wyeth-Ayerst Laboratories

Chiron Corp.

Chiron Therapeutics

Ben Venue Laboratories

Chiron Corp.’s joint venture with Ben Venue Laboratoriesacquired exclusive US rights to Wyeth-Ayerst’s Cerubidine (daunorubicin hydrochloride), an injectable chemotherapeutic drug for treatment of certain types of leukemia. (Mar.)

According to the agreement, Cerubidinewill be manufactured by Ben Venue Labs, then sold and distributed by Chiron Therapeutics. Wyeth-Ayerst will provide the venture with its trademark and technology rights to Cerubidine, along with its customer lists. In addition to marketing a line of chemotherapeutic products with Ben Venue Labs, Chiron Therapeutics markets Proleukin (aldesleukin), a treatment for metastatic renal cell carcinoma in the US and Europe.

ArQule Inc.

Pharmacia AB

ArQule Inc., (combinatorial chemistry company founded 1993) signed its first major deal worth approximately $30 million with Sweden’s Pharmacia Biotechto synthesize biomolecules for use in bioprocessing and research. (Mar.)

Pharmacia will pay most of the estimated $30 million up-front for access to ArQule’s technology and for R&D costs. Some of the payment includes milestones and royalties based on anticipated product sales. ArQule’s technology involves using non-peptide, non-nucleotide molecular building blocks to generate potential drug compounds.

AB Astra

CytoTherapeutics Inc.

Astragained exclusive worldwide licensing rights to develop and market CytoTherapeutics’ CereCRIB and other novel products for chronic pain. The deal is potentially worth $41 million to CytoTherapeutics over the next four years. (Mar.)

According to the terms of the agreement, CytoTherapeutics will receive an initial payment of $5 million and supplemental payments of at least $5 million per year to fund R&D. Astra will also pay an additional $16 million upon achievement of certain milestones, and will fund clinical trials worldwide. CytoTherapeutics gets royalties on sales and retains rights to manufacturing. CereCRIButilizes encapsulated bovine adrenal cells derived from newborn calves which secrete natural analgesics when implanted at the base of the spine, thus disrupting pain signals in the CNS. It is being developed to treat severe pain in cancer patients and is in Phase I clinical trials in the US and Phase I/II studies in Switzerland.

AB Astra

TheraTech Inc.

TheraTechsigned an agreement giving Astra of Sweden exclusive marketing and distribution rights to its transdermal testosterone patch in Scandinavia including Sweden, Denmark, Norway, Finland, and Iceland, for treatment of male hypogonadism. (Mar.)

TheraTech will receive milestone payments, royalties on sales, and retain manufacturing and future co-promotion rights in Scandinavia. The patch uses TheraTech’s permeation-enhancing technology, anti-irritant and liquid reservoir system design to deliver, on a daily basis, the amount of testosterone and its metabolites, mimicking those produced normally in healthy men. Current treatment for hypogonadism is primarily by intra-muscular injections of testosterone ester every two to four weeks.

BASF AG

Warner Lambert Co.

Warner-Lambert Co. and BASF AGannounced that together they will research, develop and market a new class of drugs that act by inhibiting interleukin-1beta9 converting enzyme (ICE). (Mar.)

A multidisciplinary scientific team representing molecular biology, cell biology, biochemistry, immunology, medicinal chemistry, molecular modeling, and X-ray crystallography has been assembled for the ICE-inhibitors collaboration. The two companies are equal research participants and equal owners of the resulting products and technologies. BASF’s Knoll AGand Parke-Davis will jointly market worldwide any drugs that are developed. ICE is an enzyme that generates the active form of interleukin-1beta9, a cytokine that’s a key mediator in the early stages of inflammation and is implicated in neurodegenerative and other diseases.

Boehringer Ingelheim International GMBH

Isis Pharmaceuticals Inc.

Boehringer Ingelheim International GMBHand Isis Pharmaceuticals Inc. (antisense, small molecules) are combining their cell adhesion programs for the treatment of inflammatory disease in a collaboration with an aggregate value of approximately $150 million. (Mar.)

Upon the close of the deal, Boehringer will make a $28.5 million equity investment in Isis; the equity purchase price will be a premium of $15 on share price and give Boehringer an 8% stake in Isis. Boehringer and Isis will share 50% of research and development costs. Boehringer will also provide Isis with access to a $40 million line of credit, and will make additional equity investments, at a premium, upon achievement of certain milestones. The companies will equally share all profits from products jointly developed. Included in this arrangement is Isis’ developmental candidate 2302 (antisense drug in Phase I clinical trials), but not Boehringer’s BIRR1 (murine monoclonal antibody in Phase II and III trials).

Chiron Corp.

Biocine Co.

GalaGen Inc.

Chironvaccine unit Biocine licensed GalaGen (gastrointestinal treatments from bovine colostrum) exclusive worldwide rights to its MF-59 adjuvant used with GalaGen’s Sporidin-G. The two companies will also co-develop H. Pylori antibodies. (Mar.)

Chiron received preferred shares of GalaGen stock for rights to MF-59, and an option to purchase warrants for additional preferred shares. GalaGen, which was spun-off from Land o’ Lakesin 1992, will use the adjuvant in producing Sporidin-G, its treatment for AIDS related diarrhea caused by the cryptosporidium parvum parasite (in Phase I/II trials). The MF-59 adjuvant should increase the treatment’s potency several-fold. GalaGen will pay Chiron royalties on sales, and may use the adjuvant with other products in the future. Both companies will contribute financial and scientific resources to the Helicobacter pylori collaboration, with Chiron retaining the option for exclusive worldwide marketing rights to any products.

Chiron Corp.

Interneuron Pharmaceuticals Inc.

Progenitor Inc.

Chironand Interneuron subsidiary Progenitor (gene and cell-based therapies) will co-develop products based on Progenitor’s gene therapy technology. If eleven targeted products succeed, Chiron could pay Progenitor $50 million. (Apr.)

Chiron will pay a $2.5 million signing fee. Progenitor must contribute $750,000 to share in Chiron’s initial manufacturing costs. Progenitor will receive $500,000 in January 1996, and the remainder of the financing will come as milestone payments on mostly late-stage clinical trials and regulatory filings. Progenitor will also receive royalties on sales. Chiron gets exclusive manufacturing and marketing rights, and Progenitor retains rights to the technology outside products specified in the agreement. Progenitor’s technology is a nonviral vector that carries therapeutic genes into cellular cytoplasm on a controlled, temporary basis. Therapeutic categories targeted include cancer, cardiovascular and infections.

Cor Therapeutics Inc.

Schering-Plough Corp.

Cor Therapeutics(cardiovascular therapeutics) and Schering-Plough will co-develop and market Cor’s Phase III platelet aggregation inhibitor Integrelin, in a deal that could be worth over $120 million to Cor. (Apr.)

SP will pay Cor $20 million upon signing, and $100 million if development/clinical milestones are met. SP will also pay, on a 3:1 basis, all clinical development costs of Integrelin. In the US and Canada, SP and Cor will co-promote, potentially splitting profits 50-50 based on 50-50 sharing of expenses, figured largely on a pre-determined cost-per-detail-call formula. In the US, Cor will also co-promote SP’s anti-angina drug Imdur, being paid on a per-call basis. In Europe, SP will launch Integrelin; in the first 3 years it will pay Cor double-digit royalties; in years 4-6, Cor will add incrementally a co-promotion effort, up to a maximum of 50% of the effort. If Integrelin fails all clinicals, SP has a call on US rights to Cor’s growth factor program, licensed in Asia to Kyowa Hakko.

Cortech Inc.

Ono Pharmaceutical Co. Ltd.

Cortech(bradykinin antagonists, neutrophil elastase inhibitors) and Ono Pharmaceutical will co-develop an orally bioavailable elastase inhibitor. Ono could pay Cortech up to $9.45 million over three years. (Mar.)

In the first year, Ono will pay Cortech a $3.25 million upfront and research payment, and an additional $1 million if Ono accepts the compound. Ono will receive exclusive, royalty-free manufacturing and marketing rights to any resulting product in Japan, Korea, Taiwan and China. Cortech retains rights elsewhere. The collaboration will focus on developing treatments for chronic inflammatory disorders such as rheumatoid arthritis and chronic obstructive pulmonary disease. Elastase is an enzyme released by white blood cells which helps the cells migrate to the inflammation site. In severe inflammatory conditions, the body’s mechanism to regulate elastase, which degrades proteins, is overwhelmed, resulting in tissue damage.

Focal Inc.

Roche Holding Ltd.

Hoffmann-La Roche Inc.

Focalsigned a multi-year research agreement with Roche and its US subsidiary Hoffmann-La Roche to develop a local delivery system for a drug to reduce post-angioplasty restenosis. Roche will pay an estimated $10mm in up-front fees and R&D funding. (Mar.)

The collaboration will combine a Roche compound that has prevented restenosis in animal models, with the FocalGelbiocompatible polymer delivery system, described as an intravascular bandage that is left at the angioplasty site to provide sustained local drug release. Focal may sign similar deals with up to 3 other partners, each of which will provide a restenosis drug that utilizes a different mechanism of action. This arrangement multiplies Focal’s chances for a success and calls for only moderate investment by each drug company partner. Marketing terms are to be set later. The partners hope that their local therapy will succeed where many systemic treatments, hampered by dose-limiting toxicity, have failed.

Genentech Inc.

Idec Pharmaceuticals Corp.

Genentechhas licensed worldwide rights to Idec’s IDEC-C2B8, a CD20-directed monoclonal antibody in Phase III for the treatment of non-Hodgkin’s B-cell lymphoma, in exchange for a potential $57 million. (Mar.)

Genentech will make a $4 million license payment and pay $5 million for 6% of Idec’s equity at $5 per preferred share (a 37% premium to Idec’s closing price of $3.63 the day prior to the announcement of the deal). Genentech will make further equity purchases of $17.5 million (the number of shares depend on the then-current trading price) prior to the drug’s FDA approval, and may pay another $30.5 million contingent upon milestones and the exercise of options for Asian marketing rights and the expansion of the deal to include radioconjugates IDEC-Y2B8and IDEC-In2B8. Genentech will hold exclusive worldwide rights excluding Asia and will co-promote in the US and Canada, with Idec receiving a percentage of profits.

Human Genome Sciences Inc.

SmithKline Beecham PLC

Takeda Chemical Industries Ltd.

SmithKline Beechamhas signed a letter of intent to sublicense the right to use Human Genome Sciences’ discoveries in genomics for the development of therapeutics to Japanese drug developer Takeda. (Mar.)

The deal would grant Takeda access to HGS’ database of human cDNA sequences and the right to develop therapeutic proteins based on the information in Japan; SB paid $125 million for the exclusive, worldwide rights to develop therapeutic proteins based on HGS’ findings in May ’93. SB and Takeda will collaborate on specific drug development programs with Takeda making milestone and royalty payments to HGS on any product it takes into development. HGS would retain all diagnostic, gene therapy, and antisense applications to its discoveries, though Takeda would have the option to license Japanese rights to HGS’ proprietary projects in exchange for further option, milestone, and royalty payments.

ImmuLogic Pharmaceutical Corp.

Schering AG

Schering AGhas licensed the exclusive, worldwide rights to ImmuLogic’s peptide for the treatment of multiple sclerosis in exchange for a potential $35.5 million in research, milestone, and equity payments. (Mar.)

Schering has committed up to $7 million in research funding and its venture capital subsidiary, Schering Berlin Venture Corp., and will pay $8 million for about 7% of ImmuLogic (trading on NASDAQ at about $8 per share; 14.8 million outstanding). An additional $20 million is contingent upon ImmuLogic’s attainment of research milestones. Schering will be responsible for all clinical trials, though ImmuLogic will pay one third of clinical trial costs. Schering will also pay a royalty to ImmuLogic upon the product’s sales. Schering currently markets Betaseron(licensed from Chiron’s Cetus subsidiary), the only approved treatment specifically for multiple sclerosis symptoms.

Immusol Inc.

Pfizer Inc.

Immusolwill be one of four biotechnology companies that will participate in Pfizer’s genome research project, Pfizergen, aimed at accelerating drug discovery by understanding the human genetic map.

Pfizer has agreed to a five-year alliance with Immusol to develop ribozyme gene therapy, initially for the treatment of patients infected with the HIV virus. Immusol will use gene therapy to enable human immune cells to protect themselves from HIV infection. Pfizer will provide R&D support and will make an equity investment in Immusol. The two companies will share manufacturing rights to any products resulting from the collaboration. Pfizer will market the products and pay milestone and royalties on sales. Other companies involved in Pfizergen are Myco Pharmaceuticals, AEA Technology, and Oxford Asymmetry.

Marion Merrell Dow Inc.

Teva Pharmaceutical Industries Inc.

Marion Merrell Dowand Teva Pharmaceutical Industries Inc. (ethical pharmaceutical products) have signed a letter of intent to collaborate in marketing Copaxone copolymer-1, in the US and Canada. Financial terms were not disclosed. (Mar.)

Newly formed joint venture Teva/Marion Partnerswill co-promote Copaxone in North America upon approval (an NDA should be submitted by mid-95). Teva will manufacture the product in Israel and, through its subsidiary, Lemmon Co., will supply the product. MMD will sell and distribute Copaxone in the US and Canada.

Myco Pharmaceuticals Inc.

Pfizer Inc.

Myco Pharmaceuticals Inc. (genetic engineering of fungi and bacteria to develop drugs) and Pfizer Inc. have agreed to collaborate in the development of antifungal drugs in a deal that could be worth up to $50 million to Myco. (Mar.)

Under the terms of the agreement, Pfizer will develop, manufacture and market any antifungal agents discovered through the collaboration. Pfizer will provide Myco with equity investment and money for research and development totaling more than $20 million over 4 years. In return, Pfizer will own slightly less than 15% of Myco. In addition, Pfizer will make product-based milestone payments to Myco that could exceed $30 million, if more than one drug is developed. Myco will also receive royalties on Pfizer’s sales and certain options for future manufacturing and marketing rights. This collaboration is part of Pfizergen Pfizer’s network of alliances with four small biotechnology companies.

Orion Corp.

Schering-Plough Corp.

Orion Corp.(biggest Finnish health care company) has granted a 10-year exclusive license allowing Schering-Plough to market Fareston (toremifene) in the US. The drug is a once-daily anti-estrogen used for treating advanced breast cancer. (Mar.)

SP also reported that it already held exclusive rights in Canada and in certain countries in Europe, Central and South America, the Caribbean, the Middle East, and Africa under a 1994 agreement with Orion. Regarding deal structure, SP said only that it will pay upfront and milestone payments; Orion keeps manufacturing rights. Orion filed the US NDA for Farestonin January and is submitting it for approval in the European Union; the drug is already sold in several European countries. The deal means a greater global presence for Orion, and it adds to SP’s existing cancer portfolio, which currently includes Eulexin (flutamide) for advanced prostate cancer and Intron A (alpha interferon) for cancers and viral diseases.

Oxford Asymmetry Ltd.

Pfizer Inc.

Oxford Asymmetry Ltd.is one of four small biotech companies that Pfizer announced it will be collaborating with in a network of gene research alliances it calls Pfizergen. (Mar.)

Pfizer will pay Oxford $5.76 million (UK3.6 million) over two years. (Pfizer’s total Pfizergen investment will be about $115 million.) Oxford, a joint venture formed in 1992 by Oxford University and an investment group, develops chiral (single isomer) compounds. Its role in Pfizergen will be to provide Pfizer with chemical libraries for testing as drug candidates. Pfizer had already set up an alliance with gene discovery company Incyte Pharmaceuticalslast summer. Other companies joining the project now in addition to Oxford are Myco Pharmaceuticals, Immusol, and UK government-owned AEA Technology.

Paracelsian Inc.

Paracelsian Inc.(cancer diagnostic assays and drug development based on Asian herbal medicines) has obtained the option to exclusively license up to seven anticancer compounds from two research institutions in China. (Mar.)

The chemicals, isolated from herbs and fungi traditionally used in China for treating neoplastic diseases, are unrelated to any currently used Western cancer therapeutics. Paracelsian’s products are based on signal transduction, a biochemical intracellular information handling process. The company will characterize the compounds’ anticancer activity, identifying their effects on the signal transduction pathways that relate to cell division. Paracelsian will arrange for Roswell Park Memorial Instituteof Buffalo to carry out in vivo preclinical work on selected candidates and to carry the strongest ones into clinical trials. Paracelsian will obtain the human safety and efficacy data already compiled in China.

Pfizer Inc.

AEA Technology

AEA Technology, a British government-affiliated business, is one of several biotechs that have signed up with Pfizerto participate in the Pfizergen genomic research project. (Mar.)

Pfizer’s Central Research group is calling the net of alliances, through which it aims to accelerate drug discovery by understanding the human genetic map, an investment strategy. It will double Pfizer’s annual spending on external research collaborations. AEA’s role is to work with Pfizer on development of antisense techniques that can identify the functions of newly discovered genes. The genes will come from Pfizer’s internal programs and from its sequencing and analysis deal with Incyte Pharmaceuticals. Pfizer has the right to apply to its in-house discovery programs all the technology that comes out of the AEA collaboration.

Recordati Industria Chimica e Farmaceutica SPA

Tsumura & Co.

Recordati Industria Chimica e Farmaceutica SPAand Japan’s Tsumura & Co. have signed an option agreement on the development and marketing of Recordati’s vasoselective calcium antagonist, lercandipine, in the Far East. (Mar.)

Under the terms of the agreement, Tsumura will have exclusive rights to market lercandipinein Japan, and semi-exclusive rights in the Philippines, Indonesia, Malaysia, Singapore and Thailand. In addition to an initial option fee, Recordati will receive milestone payments from Tsumura and supply it with commercial quantities of the active ingredient. The product is in advanced Phase III trials, with European submissions for the treatment of hypertension expected this year, and marketing approval for angina in 1996.

Taisho Pharmaceutical Co. Ltd.

Tularik Inc.

Tularik(gene regulation) and Taisho Pharmaceutical will co-develop small molecule therapeutics for immune disorders. Taisho will provide financial support and receive exclusive marketing rights in Japan and other Asian countries. (Apr.)

Tularik will also screen its library of compounds against Taisho’s. The collaboration will focus on discovering drugs that regulate the cytokine-responsive genes that control the balance of T lymphocyte white blood cells. An imbalance of these cells has been implicated in a variety of immune disorders, such as allergies, asthma and inflammation. Tularik has collaborations with two other major Japanese drug companies--Yamanouchiand Sumitomo.

FINANCINGS

Biochem Pharma Inc.

Biochem Pharma Inc. (anti-viral and anti-cancer drugs) raised Cdn$30 million from an offering of 1.5 million special warrants at Cdn$20 (US$14.26). (Mar.)

The price was about the average trading price for the three days before Biochem’s acceptance of the offer. The special warrants are convertible into 1.5 million common shares with proceeds to be applied to working capital. The money from the warrants placement already is in the bank in escrow, pending completion of the prospectus and regulatory approval, which should happen by July 10. Conversion of the warrants would give Biochem about 48.8 million shares outstanding and about Cdn$60 million (US$42.7). Biochem’s lead product, 3TC, is being developed with Glaxo Holdings PLC.

Cell Therapeutics Inc.

Cell Therapeuticsraised $25.6 million in a private placement to institutional and individual investors. International Biotechnology Trust PLC, Morningside Ventures, Schroder Ventures, Phoenix Partners, New York Life, and Vulcan Ventures participated. (Mar.)

The company believes this is the largest private placement by a biopharmaceutical company this year. Jeremy Curnock Cook, the managing director of Rothschild Asset Management which manages International Biotechnology Trust PLC, has joined Cell’s board of directors. The company will use the proceeds for R&D, and is conducting several Phase II/III trials in the US of its lead compound Lisofylline, a drug to reduce toxicities from radiation and chemotherapy treatments in cancer patients. Cell says its other compound CT-2584 (preclinical) shows potent anti-tumor activity against several cancer cell lines. It expects to begin Phase I trials in the second quarter of this year.

Genome Therapeutics Corp.

Genome Therapeutics(sequencing; formerly Collaborative Laboratories) has raised $2.1 million in a placement of 850,000 units led by Biotechnology Value Fund LP. (Mar.)

The units consist of one common share and 1.2 warrants each. The company will use the proceeds to continue sequencing human genes, as well as the gnomes of common infectious pathogens. It recently announced its successful sequencing of the entire H. pylori Genome.

Peptide Therapeutics Ltd.

Peptide Therapeutics Ltd.completed a third private placement similar to its 6/94 financing, again raising over $3.2 million (UK 2 million). Its total venture and institutional funding now totals UK 4.5 million. (Mar.)

The company specializes in peptide-based medicines against immune system disorders. It will use the funds to continue its in-house work and its several collaborative projects. PT plans to commence three clinical trial programs in the UK during 1995, including testing of an allergy vaccine it has under license from British Technology Group.

Seragen Inc.

Seragen(receptor-targeted therapeutics for cancer and dermatology) received $20.3 million in guaranteed bank loans from three sources. Boston University, the company’s largest shareholder, will guarantee $11.8 million of the $20.3 million. (Mar.)

Two other sources will secure $8.5 million, and Seragen hopes to find a fourth source to provide an additional $3.3 million to fully match BU’s guarantee. The guarantors will receive warrants to purchase 2.4 million Seragen common shares. The company’s technology is based on genetically fusing a fragment of a toxin to a hormone or a growth factor that targets specific receptors on disease-causing cells. Its lead product, Il-2 Fusion Toxin is in Phase III trials for cutaneous T-cell lymphoma, which it is developing with Eli Lilly. RESEARCH/ANALYTICAL

ACQUISITIONS

FMC Corp.

FMC Bioproducts

Applied Technology Genetics Corp.

AT Biochem

FMC Bioproducts(gels for electrophoresis) has acquired the AT Biochem division of Applied Technology Genetics (genetic disease diagnostics). (Mar.)

AT Biochem produces vinyl-based gels used for DNA sequencing and mutation detection. FMC Bioproducts believes AT Biochem’s product line complements its existing agarose gel product line used for electrophoresis.

Stratum Laboratories

Advanced Tissue Sciences Inc.

Stratum Laboratories(tissue engineering technology) has signed a definitive agreement to acquire Advanced Tissue Sciences’ in vitro laboratory testing business in a transaction potentially worth $5 million. (Mar.)

Stratum is buying certain assets of the lab testing business and is licensing rights to manufacture and sell ATS’ Skin2, living human skin tissue manufactured for testing by skin care, household product, chemical and pharmaceutical companies to test products for a variety of indications. ATS will receive $1.4 million upon close of the transaction and expects $3.6 million in license fees and milestone payments from the licensing of Skin2. ATS will also receive a warrant to purchase a minority equity position in Stratum.

JOINT ARRANGEMENTS

Beckman Instruments Inc.

BioSepra Inc.

Beckman Instruments(research and diagnostic instruments) has licensed exclusive marketing rights to BioSepra’s HyperDiffusion chromatography media, trademarked HyperD, in prepacked columns for bioresearch. (Mar.)

Beckman will pay $5 million to BioSepra for distribution and licensing rights to the products. Beckman will also provide worldwide sales and service support for BioSepra’s ProSysWorkstation, a chromatography process development system.

Biodor Holding AG

Calbiochem-Novabiochem Corp.

Oxis International Inc.

Biodordivision Calbiochem-Novabiochem (research products) will market Oxis International’s free-radical marker assays to the research market under private label. (Mar.)

Six Oxis oxidative stress assays, as well as other assays currently under development, are covered by the marketing agreement. Free radicals are highly reactive molecules that damage cells when their concentration exceeds the body’s natural antioxidant defense capacity. Many researchers now believe that oxidative stress is a basic mechanism of cell death and damage in a number of acute and chronic diseases such as atherosclerosis, AIDS, cancer, diabetes, arthritis, and traumatic injury.

The Henley Group Inc.

Fisher Scientific International Inc.

Perkin-Elmer Corp.

Fisher Scientific(research instruments) will distribute in the US Perkin-Elmer’s GeneAmp PCR System 2400 and plastic disposables to the research market. (Mar.)

The GeneAmp2400 is a low-cost thermal cycler used in the amplification of polymerase chain reaction (PCR). The product complements Fisher’s Biotech Taq DNA Polymerase System, which is also used in amplifying DNA.

ImmunoGen Inc.

Oxford Molecular Group PLC

Oxford Molecular Group PLC(computer-aided molecular design software) and ImmunoGen Inc. (biopharmaceuticals) have agreed to cross-license rights to proprietary technology for the design of humanized monoclonal antibodies. (Mar.)

Under the agreement, ImmunoGen gains access to Oxford Molecular’s antibody modeling software. In exchange, Oxford Molecular receives the exclusive right to use resurfacing to develop humanized monoclonal antibodies for all fields outside oncology, and case-by-case rights within oncology areas not under development by ImmunoGen. Oxford Molecular will pay ImmunoGen a percentage of the gross revenues it derives from its use of resurfacing. (Resurfacing is a proprietary method of antibody humanization which can be used with monoclonal antibodies of any origin).

FINANCINGS

Gelman Sciences Inc.

Gelman Sciences(filtration products for separation, purification, and sterilization of liquids and gases) has completed a follow-on offering of 1.25 million shares at an offering price of $14.625 per share. (Mar.)

Net proceeds from the offering were $17,181,250 million, which it will use to repay a term note. Gelman intends to focus its business on microfiltration products, a market which the company estimates at $1.4 billion worldwide. Investment Banks/Advisors: Cleary Gull Reiland, McDonald & Co., Roney & Co.

Sepragen Corp.

Sepragen(liquid chromatography columns) completed its initial public offering of 1.8 million units at $5.00 per unit, netting $7.293 million. If the underwriter’s over-allotment of 270,000 units is exercised in full, the company will net $8.5mm. (Mar.)

Each unit consists of one Class A common share, one Class A warrant and one Class B warrant. The Class A warrants entitle the holder to purchase one Class A common share and one Class B warrant for $6.50. The Class B warrants allow the holder to purchase one Class A common share for $8.75. Both classes of warrants expire in five years. The company will use the proceeds to expand its marketing capabilities, for research and development funding, and to expand into food and dairy applications. Sepragen currently markets two products, it Superfloradial flow chromatography columns, and Quantasep, a computer controlled liquid chromatography system. Investment Banks/Advisors: DH Blair SERVICES

ACQUISITIONS

American Homepatient Inc.

Continental Pharma Cryosan Inc.

ConPharma Home Healthcare Inc.

American Homepatient(home health services) has signed a definitive agreement to acquire Continental Pharma Cryosan division ConPharma Home Healthcare for $30 million. (Mar.)

Continental Pharma Cryosan believes with the rapid consolidation in the home health services market that it will achieve maximum shareholder value by selling the division.

FoxMeyer Health Corp.

FoxMeyer Canada Inc.

Les Ordinateurs Hypocrat

FoxMeyer Canada, a Toronto-based affiliate company of FoxMeyer Health Corp., commenced an offer in Canada to acquire all the outstanding common shares of Les Ordinateurs Hypocrat. (Mar.)

FoxMeyer Canada, an integrated managed care company whose services include pharmacy benefits and management of worker’s compensation health care, has offered one share of its stock for every ten shares of Hypocrat. The offer is not being made in the US or to US residents. Hypocrat has installed over 1500 computer and telecommunications systems at health care facilities through Quebec. Client firms include hospitals, drug stores, medical and dental clinics, rehabilitation centers, and long-term care providers.

HBO & Co.

Pegasus Medical Ltd.

HBO & Co.(range of software products for health care organizations) has signed a letter of intent to purchase Pegasus Medical Ltd. (Israeli software development firm). (Mar.)

Pegasus, founded in 1992 by a pair of doctors, has operations in Jerusalem and in Boston. Its product is the Smart Medical Record, a pen-based system that can be used in the physician’s office and other ambulatory care situations. HBOC was attracted to the system because doctors played a major role in its development, and because its architecture will integrate easily with HBOC’s own Pathways 2000product line. It will use SMR as the foundation for building a longitudinal computer-based patient record that can span the whole spectrum of a patient’s care. SMR’s intuitive graphical interface is expected to appeal to doctors. Recognizing that a great percentage of clinical data can be potentially captured in physicians’ offices, HBOC hopes Pegasus’s product will be a good source of information for its Pathways network service, where it can be applied in outcomes analysis.

Health Systems International Inc.

MD Enterprises of Connecticut Inc.

Health Systems International Inc.(CT health maintenance co.) has acquired MD Enterprises of CT Inc. (MDEC) (HMO) for approximately $100 million in cash. (Mar.)

Under the terms of the agreement, HSI retained the option to purchase all the MDEC equity with cash or with the company’s common stock. After considering the current price of its common stock, among other factors, HSI elected to pay cash and account for the acquisition as a purchase transaction. The transaction has been approved by all appropriate regulators and MDEC stockholders. HSI says the acquisition of MDEC is a major advance in its northeast strategy, where HSI plans to expand its markets to areas where HSI’s medical management expertise can reduce necessary hospitalizations and improve outcomes. HSI said the physician shareholders of MDEC were attracted to HSI because of its information-driven medical management system.

Living Centers of America Inc.

Brian Center Corp.

Living Centers of America(long-term care) will acquire Brian Center Corp., an operator of 46 long-term care centers in the Southeastern US, for $282 million in stock and the assumption of debt. (Mar.)

Living Centers will issue 6.25 million shares (trading on NYSE at about $37) and assume $51 million in long-term debt to complete the deal, which will make Living Centers the third largest long-term care provider in the US with almost 300 facilities. With the acquisition, Brian Center founder Donald C. Beaver will be appointed Vice Chairman of Living Centers. Founded in 1973, Brian Center operates facilities in North and South Carolina, Florida, Georgia, and Virginia with a total of about 5,800 beds.

Medaphis Corp.

Medical Management Inc.

Medaphis Corp., which sells business management services to doctors and hospitals, has bought all the outstanding capital stock of Medical Management Inc.of Montgomery, AL for $8 million cash. (Mar.)

MMI provides office services, including billing and accounts receivable management, to anesthesiologists. The firm’s managers will stay on. Over the past six months, Medaphis has acquired three companies specializing in business services for anesthesiologists.

Medaphis Corp.

Automation Atwork

Medaphis Corp.has acquired Automation Atwork (cost management systems and services for hospitals) and its affiliates in exchange for 4 million shares of Medaphis common stock, worth $238 million at the NASDAQ price of $59½ the day of closing. (Mar.)

Most of Medaphis’s recent string of acquisitions have cost under $10 million each and have simply expanded its business of performing billing and similar business management services for doctors and hospitals. This present merger is a much heavier investment, and it also indicates an added line of work for the company, since through Atwork Medaphis is entering the information systems business for the first time. It will now be able to offer automated patient and nurse scheduling plus resource management, such as scheduling of operating rooms. The company says the acquisition will also spread its business abroad; Atwork’s clients include 650 hospitals and more than 13,000 doctors in the US, the UK, Canada, and Australia.

MetraHealth Cos. Inc.

HealthSpring Inc.

MetraHealth Cos. Inc.(finances/administers health insurance plans; manages/delivers managed health care plans) has acquired HealthSpring Inc. (builds/manages primary care physician practices) for an undisclosed amount. (Mar.)

The acquisition concludes the definitive agreement MetraHealth announced on January 31, 1995. As a result of the transaction--MetraHealth’s first acquisition--MetraHealth now owns and manages primary care physician offices. Under the agreement, James G. Carlson, president and CEO of HealthSpring, joins MetraHealth as EVP of field operations and a member of its Executive Office management team. He will oversee the company’s locally-focused managed care activities, including sales, medical management and network management. HealthSpring will retain its identity as a separate company within the larger MetraHealth organization, and will continue to serve its existing HMO customers. Founded in 1992, HealthSpring builds and manages the HealthSpring Medical Groups, primary care group practices that provide medical services principally through prepaid contracts with HMOs.

Omnicare Inc.

Genovese Drug Stores Inc.

Genrex Nursing Home Pharmacy Division

Omnicarehas acquired the assets of Genovese Drug Stores’ Genrex Nursing Home Pharmacy Division based in Melville, NY. (Mar.)

Genrex provides comprehensive pharmacy services to 5000 residents of 40 long-term care facilities in the NYC metropolitan area and on Long Island. The company’s revenues are running at the annualized rate of $5.8 million. New York State, with its 102,000 nursing home beds, houses the country’s third greatest nursing home population. Omnicare is pursuing a program of acquiring regional pharmacy service providers--this same week, the company announced other acquisitions in Washington State and in Boston. With the acquisition of Genrex, Omnicare now serves a total of 161,350 institutional residents in 15 states.

Omnicare Inc.

Consulting and Pharmaceutical Services Inc.

Omnicare Inc.(pharmacy services for long-term care institutions) acquired the business and assets of Consulting and Pharmaceutical Services, an institutional pharmacy provider in Washington State. (Mar.)

CAPS also sells infusion therapy and medical supplies to long-term facilities and offers educational programs. It serves about 1450 residents of 21 institutions, plus other patients at assisted living centers and mental health clinics. CAPS’s employees, including its president, will remain with the company under its new ownership. The acquisition builds Omnicare’s position in the Pacific Northwest by bringing its total number of resident patients in Washington to 11,000. It complements Omnicare’s recent acquisition of Kirkland-based pharmacy services company Evergreen.

Omnicare Inc.

North Shore Pharmacy Services

Omnicare(pharmacy services and pharmacy consulting services sold to nursing homes, retirement centers, and other long-term care facilities), in its second acquisition this week, has acquired all the assets of North Shore Pharmacy Services. (Mar.)

North Shore provides comprehensive pharmacy services, pharmacy consulting, medical supplies, and infusion therapy to 2200 patients in 40 nursing homes throughout Massachusetts. Its current revenues annualize at $4 million. North Shore’s president and other staff will stay on as Omnicare employees. Omnicare just recently began business in the Northeast, where it sees growth opportunities; Massachusetts, for example, is the state with the tenth largest nursing home population (54,000 beds).

RightChoice Managed Care Inc.

HealthLink Inc.

RightChoice(managed health care benefits) agreed to acquire HealthLink, a private managed health care organization, for a minimum of $92 million in cash. (Mar.)

The transaction will include cash payments of $92 million. The acquisition would be effected through the purchase of all outstanding common stock of HealthLink to create a wholly-owned subsidiary of RightChoice. HealthLink provides healthcare network rental and utilization, administrative services in Missouri, Illinois, Indiana, and Kentucky.

Sun Healthcare Group

CareerStaff Unlimited Inc.

CareerStaff Unlimited(rehab therapist staffing) agreed to merge with former client Sun Healthcare (owns and operates nursing homes and ambulatory surgery centers), in a stock swap valued at about $143 million. (Mar.)

Each CareerStaff share will be exchanged for 0.789 of a Sun Healthcare share. Recent days closing price for Sun was $25.75, and for CareerStaff $19.25. Sun will also issue about 5.8 million newly issued common shares. CareerStaff will become a unit of the Sundance Rehabilitation Corp.division, which provides therapists to nursing homes. The acquisition will diversify Sun’s current customer base, since more than 70% of CareerStaff’s business is non-nursing home related. As a result of the merger, Sun will be the largest and only national provider of temporary therapy staffing services and third largest provider of contract rehabilitation therapy services. CareerStaff’s recent acquisitions include Healthcare Staff Resources, Central Coast Therapy Services, Allied Staffing Etc., and PRN Rehab Services.

Value Health Inc.

Diagnostek Inc.

Pharmacy benefit managers Value Healthand Diagnostek have agreed to merge in a roughly $500 million stock swap, effectively creating the industry’s largest independent PBM. (Mar.)

Diagnostek shareholders will receive 0.55 Value Health share (trading at $37.75 on NYSE the day of the deal’s announcement) for each of Diagnostek’s 24.2 million outstanding shares. Value Health, primarily a managed care and information services provider, will merge Diagnostek with ValueRx, its PBM subsidiary. The new subsidiary will be second only to Medco Containment(acquired by Merck last year) in terms of revenue, with expected combined annual revenues of about $1.1 billion. The acquisition is expected to be completed in late June.

Wellpoint Health Networks Inc.

Health Systems International

Wellpoint Health Networks Inc. has signed a definitive agreement with Health Systems Internationalunder which Wellpoint acquires HSI for Wellpoint stock valued at about 1.9 billion in a stock-swap transaction.

This merger agreement will create the nation’s largest for-profit, publicly traded HMO, called Blue Cross California(Blue Cross of California, which owns 80% of Wellpoint, gave the new HMO the rights to the Blue Cross name). Under terms of the deal, HSI stockholders would receive 1.09 shares in the new company for each HSI share. Wellpoint stockholders would receive 0.667 shares of new company stock and $12.31 in cash for each Wellpoint share. The Blue Cross Company (BCC) would retain a 44% stake in the new company and receive $1.2 billion in cash to fund a public benefit plan. BCC will receive approximately $985 million in cash and 53.4 million shares through the recapitalization.

JOINT ARRANGEMENTS

Bukstel & Halfpenny Inc.

SmithKline Beecham PLC

SmithKline Beecham Clinical Laboratories

SmithKline Beecham Corp.has bought for its clinical lab unit a minority interest in Bukstel & Halfpenny Inc., a company that specializes in clinical data integration and communications software for health care organizations. (Mar.)

As indicated by its recent purchase of pharmacy benefits manager Diversified Pharmaceutical Services, SB is taking steps to secure its place in today’s health care environment of managed care and cost containment. It wants SmithKline Clinical Laboratoriesto be able to offer information and networking solutions to its customers, which are various types of health care providers. B&H will strengthen SB’s disease management capabilities by developing open systems that incorporate data from SBCL, DPS, and other sources, including competitors. B&H has installed systems in over 1400 doctor’s office sites and has contracts for 18 community health information networks with hospitals and physician hospital organizations.

Healthcare Management Alternatives

Managed Healthcare Systems of New York

Healthcare Management Alternatives (HMA)(managed care for Philadelphia Medicaid enrollees) and Managed Healthcare Systems of NY (MHS) (Brooklyn) have announced the creation of AmeriChoice Corporation. (Mar.)

Both HMA and MHS will continue to administer existing plans in current sites as independently-owned subsidiaries of AmeriChoice. Medical providers with the NY and Philadelphia plans will remain in place and plan members will not be affected by the change. The agreement will allow the expansion of current operations into new markets. MHS services about 20% of Brooklyn’s Medicaid population involved in managed care and claims any success will be due to its ability to tailor a plan to the community it’s serving.

Physicians Health Services Inc.

Total Employee Care Inc.

The Travelers Corp.

Travelers Insurance Co.

Physicians Health Services(largest managed care company in Connecticut) and Travelers Insurance have formed an HMO/insurance carrier alliance to jointly market worker’s compensation products in the state. (Mar.)

PHS subsidiary Total Employee Care Inc.will handle medical treatment and management, while Travelers takes care of underwriting, risk financing, and management of claims under indemnity benefits (the non-medical, wage-replacement portion of worker’s comp). The combination of expertise in insurance, medical care, and managed care techniques is meant to keep prices reasonable for employers; indemnity insurance costs are lower when the care giver is mindful of the insurer’s need to get injured employees ready to return to the job quickly.

FINANCINGS

Comprehensive Care Corp.

Comprehensive Care Corp. (chemical dependency programs) will proceed with a proposed agreement to issue up to approximately 650,000 shares of its common stock, or securities convertible into such shares, in privately negotiated transactions. (Mar.)

The shares will not be publicly offered or sold by the company, and when sold will not be registered under the Securities Act of 1933 pursuant to exemptions for private transactions. The completion of the sale is pending completion of definitive agreements and various closing conditions. Comprehensive Care Corp.’s Audit Committee did not seek shareholder approval prior to the offering for fear the delay would seriously jeopardize the financial viability of the company. The board believes the private placements will provide needed liquidity and facilitate a focus on profitable operations, to close the unprofitable operations and satisfy past tax obligations.

MedE America Corp.

First Data Corp.completed the acquisition of Card Establishment Services and is spinning off CES’s Healthcare Information Services. The unit and 2 other firms, Medical Process Center and Wellmark, will be called collectively MedE America Corp. (Mar.)

MedE America will be a privately held group focused on developing a broad-based, integrated EDI (electronic data interchange) solution for processing health care claims. The company predicts that the industry’s administrative information needs will change radically, with medical claims as they are known now virtually disappearing as financial risk shifts from payers to providers. MedE’s component firms are developing an integrated point-of-service solution that will support eligibility, Medicaid enrollment, electronic claims submission, and remittance. EDI technology streamlines these functions and thus offers substantial potential savings in transaction processing. Investment Banks/Advisors: Welsh, Carson, Anderson, Prudential Equity Investor, William Blair & Co.

Medic Computer Systems Inc.

Medic Computer Systems(physician practice management systems) registered for a follow-on offering of 750,000 common shares to be sold by the company plus about 1 million shares offered by selling shareholders. (Mar.)

At recent NASDAQ share prices of about $45, the company would gross $33,750,000 for its part. Medic believes it is the leading provider of practice management systems, whether measured by revenues or by number of doctors served. The company sells to individual practices, hospitals, management services firms, and managed care organizations. Its core product, +Medic, is designed to manage the financial, administrative, practice management and clinical requirements of group medical practices. Medic also now has clinical information products that automate patient medical records, and it provides EDI services for handling billing and insurance claim transactions, plus hardware, training, and product support services. Investment Banks/Advisors: Alex. Brown, Smith Barney Shearson, Punk, Ziegel & Knoell

Pacificare Health Systems Inc.

Pacificare Health Systems Inc. (managed health care services) is planning to offer 4.5 million shares of its Class B common stock in a follow-on offering. (Mar.)

Pacificare will sell 3 million shares of Class B common stock; (an additional 1.5 million will be offered by a selling stockholder). After deducting estimated underwriting discounts, commissions and expenses of the offering payable by Pacificare, the net proceeds to Pacificare will be approximately $204 million. Proceeds will be used to repay debt, increase working capital, and for general corporate purposes. Through its Secure Horizons program, the company operates the largest Medicare risk program in the US.SUPPLIES, EQUIPMENT & DEVICES

ACQUISITIONS

Bennett X-ray Technologies

Gendex Corp.

Universal Imaging

Bennett X-ray Technologies(x-ray and mammography screening) has signed a letter of intent to purchase Gendex Corp.’s Universal Imaging division. The companies have not disclosed terms. (Mar.)

Dentsply, parent of Gendex, announced its intention to divest Gendex’s medical X-ray business in mid-October, leaving Gendex with its dental x-ray business. Dentsply wishes to exit the medical business to focus on its core dental business.

Dentsply International Inc.

Maillefer Instruments SA

Dentsply(dental products) will purchase 95% of Maillefer Instruments (Swiss-based manufacturer of endodontic instruments) for $63 million (11,000 SFR per share). (Mar.)

Maillefer, with annual sales of approximately $30 million, is the world’s largest manufacturer of endodontic instruments. Its product line includes broaches, files, burs, pin and post systems and surgical twist drills. Dentsply develops and manufactures a variety of dental products, including artificial teeth, x-ray equipment and crown and bridge materials. The company distributes its products in over 100 countries.

Minntech Corp.

Amicon Inc.

Minntech Corp. (dialysis supplies and devices) has signed a letter of intent with Amicon Inc. (MA) to acquire Amicon’s hemoconcentrator, hemofilter, and dialysate filter product lines for an undisclosed amount. (Mar.)

The price will be paid in two cash installments. Minntech will fold the acquired product lines into its business units that manufacture and market hemoconcentrators and hemofilters. Minntech believes that Amicon’s filter products fit its plan for business expansion and it anticipates incremental sales of $5 million in the first year. Hemoconcentration is a technique used in approximately 30% of all open-heart procedures in the US to remove excess fluids from the blood. Hemofiltration is a blood cleansing therapy for treating acute renal failure. The dialysate filter broadens Minntech’s dialysis product lines.

Nellcor Inc.

EdenTec Corp.

Pierre Medical

Nellcor, through its home health care subsidiary EdenTec, agreed to acquire Pierre Medical, a private French manufacturer of respiratory products used in the home, for undisclosed consideration. (Mar.)

Pierre Medical markets non-invasive ventilators, sleep apnea therapy systems, oxygen concentrators and other respiratory products sold primarily in France and Germany. The products have been approved for sale in Western Europe, and are awaiting approval for marketing in the US. The acquisition gives Nellcor and EdenTec access to a worldwide marketing and distribution network. This month Nellcor also made a minority equity investment of $2.1 million in Heartstream, makers of automatic external defibrillators.

Quest Medical Inc.

Neuromed Inc.

Quest Medical(disposable devices) will acquire Neuromed Inc., a manufacturer of neurological stimulation devices, for about $26.2 million in cash, stock, and other considerations. (Mar.)

Quest will pay $15.2 million in cash and issue 833,000 shares to complete the acquisition, provided the shares close on NASDAQ above $6.00 per share on the day of the deal’s closing. Quest will additionally pay up to $6 million contingent upon Neuromed’s product sales achieving specific milestones. Neuromed, which posted revenues of $3 million on sales of $8 million for the fiscal year ended October 31, 1994, manufactures electronic spinal attachments for the treatment of chronic pain, distributed by Cordis Corp.

Respironics Inc.

Vitalog Monitoring Inc.

Respironics Inc.(develops/manufactures respiratory products) has agreed to acquire Vitalog Monitoring Inc. (designer/manufacturer/marketer of sleep monitoring and diagnostic equipment) for an undisclosed amount. (Mar.)

Under terms of the agreement, Dr. Laughton Miles will join Respironics, as will Zeala Dunlop Miles, the other principal owner and current Vitalog president. The transaction is expected to be concluded in April. Respironics sees Vitalog’s products as an appropriate complement to its therapeutic systems for the treatment of obstructive sleep apnea, and they represent a natural extension of its largest single business segment. Vitalog ‘s annual sales total approximately $1 million.

Sunrise Medical Inc.

Corona Group

Sunrise Medical(recovery, rehabilitation and respiratory products) has acquired Corona Group, a leading French manufacturer of health care beds, for $43 million--$37 million in cash and $6 million in Sunrise stock. (Mar.)

Sunrise says that Corona’s products are similar to products manufactured by its Joerndivision in the US, but health care beds are difficult to export because each country tends to have its own requirements. It wanted a manufacturer based in Europe where it already has an established distribution force. Corona, a privately-held company owned by the Suzanne family, was founded in 1954 and has annual revenues of about $37 million.

JOINT ARRANGEMENTS

Arrow International

Cardiac Pathways Corp.

Arrow(disposable catheters) agreed to invest $9 million in convertible preferred stock of Cardiac Pathways, a company focused on the development of new technology for treating cardiac tachyarrhythmias. (Mar.)

In addition to the equity investment, Arrow will pay $3 million as a pre-paid royalty for certain manufacturing and distribution rights to Cardiac’s proprietary Trio/Ensemble(mapping catheter system) and Radii radio frequency ablation catheters for supraventricular tachycardia, a condition involving abnormally rapid heart beats caused by electrical short circuits in the atrial chambers of the heart. Arrow will have worldwide distribution rights with the exception of Japan and some European countries where Cardiac already has distribution arrangements.

Biomatrix Inc.

Recordati Industria Chimica e Farmaceutica SPA

Biomatrix Inc. (products using biopolymer technology) has signed a marketing agreement for Italy with Recordati Industria Chimica e Farmaceutica SPAto market Synvisc, Biomatrix’s proprietary product for treating osteoarthritis. (Mar.)

Under the agreement, Biomatrix receives certain payments, including the purchase by Recordati of 250,000 shares of Biomatrix common stock. Biomatrix will manufacture and supply Synviscto Recordati for an increasing percentage of net Synvisc sales over time. Recordati has exclusive marketing rights for Synvisc in Italy for up to 15 years. With this deal, Biomatrix has Recordati as a distribution partner in Italy, and Roche-Syntex as its distribution partner in other European countries; Biomatrix has created a strong sales network in major European markets. Synvisc is an elastoviscous biopolymer, injected into joints to supplement and restore the properties of synovial fluid, compromised by osteoarthritis.

Celsis International

Nova Biomedical

Celsis International(UK) has established a manufacturing and product development alliance with Nova Biomedical (clinical diagnostics systems) regarding the manufacture of Celsis’ microbial colony counter, the Scan500 system. (Mar.)

Nova will manufacture the Scan500 system in bulk, with the first instruments expected to be produced in May ’95. Nova will also collaborate in the development and manufacture of Celsis’ rapid contamination monitoring systems. Nova believes the alliance reflects the worldwide trend of experienced manufacturers working in partnership with earlier stage biotechnology companies to design, develop and manufacture multiple products from a proprietary technology base. Celsis will be able to focus on market development.

Davstar Industries Ltd.

FoxMeyer Health Corp.

Davstar Industries(disposable disease specific healthcare products) announced an alliance with FoxMeyer Health Corp. (health care products supplier), with FoxMeyer investing $5 million in Davstar debt and equity. (Mar.)

FoxMeyer will invest $1 million in convertible debt and $4 million in convertible equity. The debt has a 5 year term and a face amount of $2 million (with a $1 million original issue discount), pays 6.25% interest semi-annually on its face value, and can be converted into common stock (again from its face value) at $2.00 per share one year after issuance. The preferred stock has a face value of $6 million (with a $2 million original issue discount), a pay-in-kind dividend of 6.25% semi-annually and is convertible into common at $2 per share in one year. Davstar will issue FoxMeyer 1.6 million warrants exercisable at $2 per share for 5 years. In addition, FoxMeyer will also distribute Davstar products through its 800 stores.

Esaote SPA

Medical Graphics Corp.

Medical Graphics(St. Paul, MN; noninvasive cardiorespiratory diagnostic systems) licensed exclusive North American marketing rights to the stress ECG technology of Esaote SPA (Italian maker of computerized ultrasound and electrocardiogram systems). (Mar.)

Under the three-year agreement, MedGraphics’ sales force, which already calls on the cardiology market, will broaden its market by selling the Esaote stress ECG systems to hospitals and to primary care doctors in conjunction with its own cardiopulmonary exercise testing systems. The US company feels it will be able to significantly increase its market potential without adding major selling expenses. The agreement also grants MedGraphics future licensing rights to Esaote’s technology.

JCR Pharmaceuticals Co. Ltd.

Medi-Ject Corp.

Through its new licensing partner, Japanese drug company JCR Pharmaceuticals, Medi-Ject Corp.will introduce its Medi-Jector needle-free injection system to the Japanese market for use with human growth hormone. (Mar.)

The agreement will strengthen JCR’s hGH market position in Japan, where it will hold exclusive marketing rights. JCR obtained Japanese regulatory approval for use of the subcutaneous self-injection device with the hormone, which it licenses from Bio-Technology General. Insulin is the only other drug approved in Japan for needle-less self-injection. Patients who use hGH are children who suffer from growth retardation and typically have to take shots of the hormone every day. The painless injection method encourages compliance and improves patients’ quality of life. Last summer Medi-Ject licensed Ferring AGEuropean rights to the device for use with hGH.

FINANCINGS

ATS Medical Inc.

ATS Medical, (mechanical heart valves), raised approximately $14.8 million in net proceeds from its registered direct placement of 3.6 million shares of common stock and 3.6 million warrants to purchase one-quarter of a share of common stock. (Mar.)

Each warrant represents the right to purchase 1/4 of one share of common stock at an exercise price per whole share of $6.75, valid until March 2, 1997. (Recent days’ closing price was $4.50 per share.) Proceeds from the offering will be used for general corporate purposes, ongoing clinical studies, valve component purchases, and to repay short-term indebtedness. ATS’s valves are sold in international markets and are awaiting US FDA approval. The valve offers improved performance by being easier to implant and monitor than standard mechanical heart valves. Investment Banks/Advisors: Raymond James

Collagen Corp.

Target Therapeutics Inc.

Collagen(biocompatible products for cosmetic reconstruction, urinary incontinence and bone repair) will offer $40 million in exchangeable subordinated notes due 2002, with an additional $5 million in underwriter’s over-allotments. (Mar.)

The notes will be exchangeable for common shares of Target Therapeuticsowned by Collagen; Collagen currently owns 34% of Target. Target, which manufactures micro-catheters, guide wires and micro-coils used in minimally invasive surgery, will not receive any proceeds from this offering. Collagen will use the proceeds for working capital, R&D expenses, to repurchase its own shares and for strategic acquisitions and alliances. Investment Banks/Advisors: Alex. Brown

Gelman Sciences Inc.

Gelman Sciences(filtration products for separation, purification, and sterilization of liquids and gases) has completed a follow-on offering of 1.25 million shares at an offering price of $14.625 per share. (Mar.)

Net proceeds from the offering were $17,181,250 million, which it will use to repay a term note. Gelman intends to focus its business on microfiltration products, a market which the company estimates at $1.4 billion worldwide.

Medical Polymers Technologies Inc.

Medical Polymers Technologies Inc.(develops/commercializes polymer-based technology products) announced the completion of an $800,000 private placement offering. (Mar.)

The placement was structured in units consisting of subordinated notes yielding 10% with warrants such that $.99 of each $1.00 invested is attributed to the notes and $.01 attributed to the warrants. The warrants are exercisable into 2.94 shares of common stock any time between September 1, 1995 and March 1, 2000 at $.15 per share. At this offering level, shares outstanding on a fully diluted basis will increase to 14,000,000 from 11,700,000. Proceeds from this financing will be used to build inventory and provide marketing support for the introduction of three new products.

Neocrin Co.

Neocrinraised $12.5 million in a self-managed private offering, selling approximately 2.5 million shares of Preferred Stock Series C. (Mar.)

Investors included Aspen Ventures, Domain Assoc., Sprout Group, Alliance Technology, CytoTherapeutics, and its largest shareholder (30% stake) Baxter Healthcare. Neocrin develops bioartificial pancreas designed to provide near normal glucose regulation for Type I diabetics. The minimally invasive implantable device has several hundred thousand islets covered with polymeric capsules enclosed in a larger, single-unit membrane device. Neocrin hopes to file an INDA early in 1996.

Sparta Surgical Corp.

Sparta Surgicalterminated its public offering of 1.6 million units. The company hoped to net $5 million from an offering price between $3.00 - $4.00 per unit. (Mar.)

Each unit consisted of 4 common shares and three series B warrants to purchase common shares exercisable at $1.20 for five years. The offering ran into trouble immediately following its commencement on March 21, when NASDAQ delisted the units because it felt they did not meet NASDAQ listing criteria. The offering’s underwriter, Coleman & Co. Securities, then terminated its underwriting agreement and halted the offering. The next day NASDAQ reversed its decision and allowed the units to be listed, however on March 31 Coleman advised Sparta that they would not resume the offering. Sparta’s last public offering in July was also a disappointment, netting only $1.6 million of an anticipated $3-5 million. Investment Banks/Advisors: Coleman and Co. MISCELLANEOUS

FINANCINGS

Playtex Products Inc.

Playtex Products(consumer products including tampons, baby bottles, sunscreens) signed a definitive agreement to sell 20 million new common shares (a 40% stake) to Haas Wheat Investment Partners at $9 per share, a 20% premium over recent averages. (Mar.)

Proceeds from the financing will reduce Playtex’s senior debt, reducing the interest burden on the $954 million it owes by about $420 million per year. Haas Wheat’s chairman is expected to become the new chairman of Playtex, whose current chair and CEO will resign those positions but stay on the board. The agreement prohibits Haas Wheat, under most circumstances, from increasing its stake above 46% for at least five years. Playtex is also arranging with Chemical Bank to refinance $500 million of senior debt.