IDH.L Regulatory News (IDH)

21 Feb 2005 10:08

Immunodiagnostic Systems Hldgs PLC21 February 2005 21 February 2005 Immunodiagnostic Systems Holdings PLC ("IDS" or the "Company") £1.5m Acquisition of SBA Sciences IDS, a leading producer of diagnostic testing kits, announce the acquisition ofBoneTRAP(R) diagnostic assay ("BoneTRAP(R)") technology and related assets ofSuomen Bioanalytiikka Oy ("SBA Sciences") of Oulu, Finland, for a maximumconsideration of £1.5m. The acquisition is the Company's first since joining AIMin December last year. IDS operates in the in-vitro diagnostics ("IVD") market. It designs,manufactures and sells immunoassay kits which are used to measure or detectparticular substances within a sample, thus aiding the diagnosis or monitoringof a disease or providing information for research studies. In 2002 theimmunoassay sector of the IVD market was estimated to be worth US$ 3.9bn. BoneTRAP(R) tests for osteoclasts, bone cells that are responsible for bonedegradation. Osteoclasts dissolve fatigued bone, and osteoblasts replace theweakened bone with viable new bone, a continuous metabolic process called "boneremodeling." Approximately 10 per cent of the skeleton is 'turned over' orrenewed each year in this way. As the result of disease or aging, the activity of osteoclasts may accelerate,particularly in post-menopausal women, whilst the activity of osteoblasts mayremain normal or diminished. This result is an imbalance in the bone remodelingprocess resulting in a net loss of skeletal mass. Osteoporotic fractures of thehip, the spine and elsewhere are a major cause of morbidity in the elderly, anda major cost centre to health systems globally. Diseases that are marked by increased bone degradation include osteoporosis,osteomalacia, and renal osteodystrophy, metastatic cancer of bone and multiplemyeloma, and therefore the tests have application in the diagnosis and treatmentof such diseases. The pharmaceutical industry has great interest in monitoring the efficacy oftheir upcoming therapies to counter bone disease, and the ability to measureBoneTRAP(R) in animals used during pre-clinical trials represents a verysignificant market. For the year ended 31 December 2004 SBA Sciences made gross profits of £146,000on turnover of £281,000, and had net assets of £160,000. The maximum consideration payable for BoneTRAP(R) will be £1.5m which consistsof: • £700,000 upfront cash payment funded through existing cash resourcesand debt finance. • 3 annual royalty payments of £70,000 to £140,000, depending onspecified level of sales being achieved on the first, second and thirdanniversaries of the completion of acquisition. • £210,000 payable upon receipt of a 510(k) regulatory approval fromthe US FDA, which will clear it for use in the Clinical market. • £210,000 upon reimbursement status from US Medicare, which willfacilitate its uptake by clinical and reference laboratories throughout theUSA.. Dr Roger Duggan, Managing Director of IDS, added: "We are excited about the acquisition of the BoneTRAP(R) assays, as theserepresent excellent complementary products to our existing Bone & Skeletal rangeof products. In the markets where BoneTRAP(R) has been professionally marketedsuch as the USA and Germany, it has seen a rapid and sustained growth in uptakeby researchers and clinical triallists. Therefore the Directors believe there isthe opportunity to accelerate sales through our German and US subsidiaries, andto apply our marketing expertise to penetrate lucrative markets that have barelybeen tapped. " Enquiries: IDS Holdings plc Binns & Co PR Ltd David Evans, Chairman Roger Duggan, Managing Director Paul McManusTel: 07740 084 452 Tel: 0191 519 6109 Tel: 020 7153 1485 Mob: 07980 541 893 This information is provided by RNS The company news service from the London Stock Exchange