Endocare Inc has sold its cardiac-related product manufacturing operations and licensed the related intellectual property to Montreal-based CryoCath Technologies Inc. Under the terms of the agreement, Endocare will transfer all of its manufacturing assets and inventory related to the cardiac product line to CryoCath and will exclusively license to CryoCath for cardiovascular uses Endocare's proprietary technology associated with the Surgifrost system -- a cryoablation system designed to treat cardiac arrhythmias including atrial fibrillation. Terms of the agreement include the payment by CryoCath to Endocare of $10 million during 2003 based on certain manufacturing and R&D milestones. The agreement also calls for the payment by CryoCath to Endocare of a nine-year descending royalty stream based on net sales of the Surgifrost system.
Endocare President William J. Nydam said that licensing of the cardiac technology and disposition of those related assets marks the second strategic divestiture this month in line with the company's strategy to refocus on accelerating adoption and extending its core technology of tumor cryoablation.
"This agreement allows Endocare to continue to capitalize on the cardiac market segment, while eliminating the ongoing expense of those related manufacturing operations -- allowing us to further increase our focus on the adoption of cryoablation in urology and other tumor ablation applications," said Nydam. "Arrhythmias, especially atrial fibrillation, are a growing health concern worldwide, and the CryoCath products targeting these conditions represent a substantial licensing opportunity for Endocare."
In September 2001, Endocare and CryoCath announced a five-year exclusive global supply and market access agreement for a new, advanced line of surgical probe systems to surgically treat cardiac arrhythmias. Under that original agreement CryoCath purchased the systems from Endocare and marketed them on a global basis under the CryoCath trademark, Surgifrost. That original agreement has been terminated.