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NYCOMED TO PAY $ 55 MIL. FOR CONTRAST IMAGING FIRM SALUTAR

Executive Summary

NYCOMED TO PAY $ 55 MIL. FOR CONTRAST IMAGING FIRM SALUTAR under an option agreement announced by the two firms in October. A merger with Salutar, Nycomed noted, "will substantially strengthen Nycomed's international position within medical imaging diagnostics." The Norwegian company is a market leader in X-ray and ultrasound contrast media and expects Salutar to provide new products in the magnetic resonance imaging (MRI) market. Sunnyvale, California-based Salutar is an R&D stage company focusing on paramagnetic contrast imagining agents for MRI. Privately held, Salutar has funded its research activities with $ 8.3 mil. raised from venture capital sources since its founding in 1985. Salutar's pipeline includes several contrast imaging agents in clinical trials, including S-FDF, a magnetic resonance imaging agent for the urinary tract. In addition, the joint press release announcing the merger agreement highlights a brain imaging agent, S-041. Salutar submitted an IND for S-041 in mid-October. A third agent, S-095, an MRI contrast agent for imaging organs such as the liver, heart and kidneys, is in Phase III clinicals. Sterling has licensed marketing rights to S-095 in the U.S. The agreement also gives Sterling the option on future selected Salutar imaging agents. Salutar currently has only the one licensing agreement with Sterling. That arrangement makes for a good fit with Nycomed, which markets all its contrast imaging agents through Sterling in the U.S. Sterling's leading Rx product Omnipacque (iohexol), developed by Nycomed, will generate sales in 1988 well over $ 100 mil. in the U.S. Sterling also markets Omnipaque's predecessor Amipaque (metrizamide). In addition, Sterling and Nycomed signed an agreement in June 1987 that gave Sterling the right to commercialize all new diagnostic imaging agents emerging from Nycomed R&D over a ten year period ending in 1997. "Nycomed will in the impending future enter into dialogues with Salutar and some of Nycomed's most important licensees in order to discuss the terms and strategy for the marketing of Salutar's products," a joint release states. The Norwegian company has entered into a number of relationships with U.S. medical technology firms in recent years. In January, Nycomed announced an agreement with Molecular Biosystems under which Nycomed gained exclusive overseas rights to the imaging agent Albunex, 300,000 newly-issued Molecular Biosystems' shares and 300,000 warrants exercisable for five years. Molecular Biosystems announced Nov. 3 that Albunex is now moving into Phase III clinicals. Nycomed is handling overseas trials. Hafslund Nycomed Group, the parent company of Nycomed A/S, has until April to exercise its option to acquire Salutar. Based in Oslo, Hafslund Nycomed Group is a publicly traded company with interests in energy, metals, pharmaceuticals, and imaging agents.
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