Devicor Medical Products Inc. acquired the breast care unit from the Johnson & Johnson (NYSE:JNJ)subsidiary Ethicon-Endo Surgery.
The newly acquired business will be known as Mammotome, a Devicor Medical Products company. As part of the deal, Devicor also acquired marketing and distribution rights for Neoprobe Gamma Detection Systems (OTC:NEOP).
Pleasant Valley, Wis.-based Devicor, which is owned by private equity firm GTCR Golder Rauner LLC, made the offer to purchase the unit in March. Financial terms of the deal were not disclosed.
Johnson & Johnson was shopping the breast care unit because it wanted to invest in businesses with higher growth potential, according to the Wall Street Journal. J&J, like other pharma giants, is streamlining its operations because of rising regulatory hurdles and drug-development costs and increased competition from generic drugmakers.
New Devicor and Mammotome CEO Tom Daulton said in an early March release that his company had $250 million from private equity firm GTCR to buy "established interventional medical device businesses that make and sell products to clinicians in hospitals, surgery centers or ambulatory clinics." Devicor’s first acquisitions were supposed to "provide infrastructure and personnel in key areas such as manufacturing, R&D, engineering, sales & marketing, finance and human resources," according to the release.
Ethicon Endo-Surgery’s breast care business sold products designed to help doctors diagnose breast cancer at early stages while minimizing patient discomfort, GTCR said. The products are sold in about 50 countries around the world and include the Mammotome Breast Biopsy system and the tissue markers MammoMark, MicroMark and CoreMark, which are used for diagnostic sampling of breast diseases, according to the release.
The equity player invests mainly in emerging technology companies and is in the process of building out its equity holdings in medical device companies. “The acquisition of the Breast Care business is the first step in achieving our objective of building a global medical device business,” said GTCR Principal Dean Mihas in prepared remarks.
GTCR formed Devicor with Daulton to focus on minimally invasive surgical procedures. The PE firm’s investment strategy involves hiring experienced managers with expertise in specific arenas and building companies around them through acquisition and organic growth, according to its website. Daulton is a former senior executive at Cardinal Health (NYSE:CAH), a Dublin, Ohio-based pharmaceutical and medical product distributor.
In February, Ethicon notched a win in a patent spat with Hologic Inc. (NSDQ:HOLX) over the MammoTome technology. Ethicon had accused the Bedford, Mass.-based women’s health products maker of violating a quartet of patents with its ATEC system, and of violating false advertising laws. Hologic agreed to settle the case for $12.5 million and inked a cross-licensing deal that calls for it to pay Ethicon royalties on sales of its ATEC and EVIVA products; Ethicon will pay royalties to Hologic on sales of the Mammotome MR device.
Material from MedCity News was used in this article.
