CTI Molecular Imaging Inc, a leading provider of positron emission tomography (PET) equipment, molecular imaging biomarkers and services, announced a definitive agreement for the acquisition of Concorde Microsystems Inc, a company release said.
Concorde Microsystems is the leading provider of small animal PET systems for imaging laboratory animals used in medical research.
After closing, the acquisition will increase the capabilities of CTI Molecular Imaging to broadly serve the research and pharmaceutical markets, where CTI already has many existing relationships to supply research isotopes and PET expertise to several world-class pharmaceutical companies.
In combination with its PETNET national network of radiopharmacies, CTI Molecular Imaging intends to leverage the acquisition of Concorde to accelerate the discovery of new molecular imaging biomarkers for the clinical market.
The transaction is structured as an asset purchase and is expected to close on June 30, 2004. The total consideration paid in connection with this acquisition is $41 million in cash and unregistered shares of CTI's common stock, plus the potential for incentive payments that are contingent upon the future financial performance of Concorde Microsystems. Due to the related- party nature of the acquisition, the transaction was reviewed by the Audit Committee of CTI's Board of Directors and was considered and approved only by independent board members.
"Concorde Microsystems has developed the premier technology for performing PET studies on laboratory animals used in basic and medical research. Concorde has the leading franchise in a market with tremendous growth opportunities. Their hardware systems are an excellent complement to the PET isotopes that we offer our research customers," said Thomas J Hook, president of CTI Solutions and senior vice president of CTI Molecular Imaging.
"More importantly, this is another step in CTI Molecular Imaging's evolution toward a focus on developing new molecular probes and biomarkers for the diagnostic market. We intend to augment our own internal development of these compounds through partnerships with the leading pharmaceutical research organizations in the world," continued Hook. "We want to strengthen our role as the leading supplier to the research market of important molecular imaging know-how, and the completion of this acquisition will solidify our position significantly," he added.
Concorde Microsystems has a broad customer base in medical research, with an estimated market share of greater than 80 per cent. The National Cancer Institute's (NCI) Small Animal Imaging Resource Program (SAIRP) grants research funding with an emphasis on molecular and genomics imaging of cancer in-vivo. Of the ten research institutes participating in SAIRP, seven utilize at least one or more Concorde microPET systems, the release continues.
"Concorde has chosen to join CTI Molecular Imaging because of its unique capabilities in molecular imaging," said Robert Nutt, president and CEO of Concorde Microsystems. "CTI's resources in PET technology and new biomarker development make it the best positioned company to capitalize on the promise of molecular medicine, and Concorde can help to further CTI's leadership in this endeavor," he added.
CTI does not anticipate a significant charge for in-process research and development expenses at Concorde. The transaction is expected to be dilutive to CTI Molecular Imaging's earnings results in the fiscal fourth quarter of 2004 by $0.01 and neutral to earnings results in fiscal 2005.