China Medical Technologies has entered into a definitive asset acquisition agreement with Molecular Diagnostics Technologies to purchase its HPV-DNA biosensor chip and surface plasmon resonance based analysis system for the detection of human papillomavirus, which causes cervical cancer and sexually transmitted disorders.
Under the terms of the asset acquisition agreement, the company will pay an aggregate cash consideration of $345 million in installments with the final payment to be made one year after the closing of the acquisition.
The company expects to use its existing available cash to pay for the acquisition. The closing of the acquisition is subject to customary closing conditions and is expected to occur in December 2008 or January 2009. No regulatory approvals are needed for the consummation of the acquisition.
HPV-DNA biosensor chip is a label-free DNA chip for the diagnosis of human papillomavirus (HPV) infection and genotyping of HPV. The HPV chip can identify each of 24 distinctive common HPV genotypes, including 16 high-risk genotypes and eight low-risk genotypes. It can also identify mixed HPV infection and can be used to guide individual therapy and vaccination. The HPV chip is expected to be used in the gynecology and dermatology departments of hospitals.
The surface plasmon resonance based analysis system (SPR System) utilizes surface plasmon resonance technology, a biosensor technology in molecular biology. HPV can be detected by adding pathological samples on the HPV chip which is analyzed with the SPR System. The SPR System is reported to be label-free with high throughput, high speed and a high degree of automation. The detection results can be displayed on a real-time and online basis.
The SPR System can be used in various clinical diagnostic applications, such as the detection of biomarkers related to infectious diseases, cancers, cardiovascular disorders and immune system disorders. The company plans to develop and introduce more products for such applications.
Xiaodong Wu, chairman and CEO of China Medical Technologies, said: “We expect the acquisition to broaden our range of molecular diagnostic product offerings, increase our high margin recurring revenues and provide an additional growth engine. We expect the integration process for the acquisition to be smooth and plan to begin offering the HPV chip and the SPR System in the first quarter of 2009.”
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