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Volcano Announces Agreement to Acquire CardioSpectra
CardioSpectra's ultra-high-resolution OCT offering will enhance Volcano's technology leadership position and potential for product pipeline expansion
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December 10, 2007, San Diego --
Volcano Corporation (Nasdaq: VOLC), a provider of intravascular
ultrasound (IVUS) and functional measurement (FM) products designed
to enhance the diagnosis and treatment of vascular and structural
heart disease, said today that it has reached a definitive agreement
to acquire CardioSpectra, Inc., a privately-held company developing
innovative Optical Coherence Tomography (OCT) technology. CardioSpectra's
unique OCT imaging system is expected to complement Volcano's existing
product offerings and will further enhance Volcano's position as
an imaging technology leader in the field of interventional medicine.
Under terms of the agreement, Volcano will pay $25 million in cash at closing,
which is expected to occur by the end of the year. In addition,
Volcano may make additional payments based on the achievement of
certain product development, regulatory and revenue milestones.
Any future payments may be made in cash or stock or a combination
of both at Volcano's discretion.
Founded in 2005 and based in San Antonio, Texas, CardioSpectra's core product
line is based on technology licensed from the University of Texas
and Dr. Thomas Milner, a co-founder of CardioSpectra.
"We believe CardioSpectra's OCT technology and products will be an important
addition to Volcano, as we expect that it will allow us to expand our reach into
clinical situations where extremely high resolution imaging is paramount. Our
long term goal is to integrate this OCT functionality directly into our s5i integrated
imaging suite of products - offering hospitals and physicians a complete, multi-functional
capability that seamlessly provides IVUS, functional measurement and OCT all
in one system," said Scott Huennekens, president and chief executive officer
of Volcano.
"CardioSpectra's OCT system allows fast, easy imaging of highly detailed structures
in the vasculature, including vessel wall defects, intra-luminal thrombus and
stent struts. The ability to visualize stent expansion and apposition is excellent
when using OCT. In fact, CardioSpectra's OCT resolution is such that it is able
to visualize even very thin layers of cells covering drug eluting stent struts
at follow-up. We expect this capability will be highly valued by other device
manufacturers as they design and conduct clinical trials to assess the safety
and effectiveness of new implantable devices," he continued.
"The resolution from this system is truly remarkable - providing significantly
greater resolution in the near field than conventional IVUS. Rather than competing
with our IVUS offerings, OCT complements our existing business by opening up
clinical indications and research opportunities beyond those available to IVUS."
CardioSpectra's offering consists of a console with advanced custom software,
a pull-back device and disposable catheters. The system and accessories are not
approved for human use at this time. The company expects to file for appropriate
U.S. and international approvals during 2008. CardioSpectra holds a number of
issued U.S. patents on its technology with many additional patents pending.
Chris Banas, chief executive officer of CardioSpectra, stated, "We believe CardioSpectra
and Volcano are a very strong fit. Volcano brings a deep knowledge of the field
of invasive imaging, an exceptional worldwide distribution organization and the
eventual ability to integrate our OCT imaging system into their integrated s5i
invasive imaging suite. IVUS and OCT have the potential to be highly complementary,
particularly when both systems are integrated directly into the cath lab and
ready for use at a moment's notice. CardioSpectra adds a new dimension in imaging
to Volcano and will provide a group of very talented OCT engineers to the team."
Steve Bailey, MD, Professor of Medicine and Radiology and Chief of Cardiology
at the University of Texas Health Sciences Center, San Antonio, commented, "I
have used CardioSpectra's current system and catheter on many occasions in our
animal lab here in San Antonio. This system is fast and very easy to use - and
the images are truly extraordinary. With the resolution provided by CardioSpectra's
OCT we are able to see stent malapposition and vessel wall morphologies with
a clarity never before achieved. I believe that marrying this technology with
the strong clinical and market development team at Volcano will create a powerful
combination."
Volcano indicated that it will discuss the impact of this transaction on its
expected fiscal 2008 results when it provides guidance for fiscal 2008 on its
fourth quarter conference call in February. Additional details on the transaction
can be found on Volcano's Current Report on Form 8-K, filed today with the Securities
and Exchange Commission.
About Volcano
Volcano Corporation (Nasdaq: VOLC) offers a broad suite of devices designed to
facilitate endovascular procedures, enhance the diagnosis of vascular and structural
heart diseases and guide optimal therapies. The company's intravascular ultrasound
(IVUS) product line includes ultrasound consoles that can be integrated directly
into virtually any modern cath lab. Volcano IVUS offers unique features, including
both single-use phased array and rotational IVUS imaging catheters, and advanced
functionality options, such as VH(TM) IVUS tissue characterization and ChromaFlo(R).
Volcano also provides functional measurement (FM) consoles and single-use pressure
and flow guide wires. Currently, more than 2,900 Volcano IVUS and FM systems
are installed worldwide, with approximately half of its revenues coming from
outside the United States. For more information, visit the company's website
at http://www.volcanocorp.com.
About CardioSpectra, Inc.
Founded in 2005 and headquartered in San Antonio, Texas, CardioSpectra is focused
on the development of innovative medical devices based upon an extensive patent
portfolio of Optical Coherence Tomography (OCT) systems and associated technologies.
OCT images are created by detecting light reflected from tissue, forming optical
interference patterns that generate high- resolution 2D and 3D renderings of
the tissue structure. Regulatory approval is currently being sought for its Spectral-Domain
OCT System, which provides high-level capability to both visualize stent placement
and determine the progress of coronary stent healing. The company's products
are based on technology licensed from company co-founder Dr. Thomas Milner, a
collaborative research program between the University of Texas at Austin, where
Dr. Milner is a Professor of Biomedical Engineering, and the University of Texas
Health Science Center in San Antonio (UTHSCSA), where cardiologist and co-founder
Dr. Marc Feldman is a Professor of Medicine. UTHSCSA's Office of Technology Ventures,
under the leadership of former Director, Alan H. Dean, spearheaded the multi-institutional
license agreement. The company was spun out of the University of Texas system
by Dr. Paul Castella (President and CFO) and Christopher E. Banas (Chairman and
CEO), who are principals of Targeted Technology Ventures, LLC. Together, they
organized the equity financing of CardioSpectra and managed the advancement and
commercial development of the OCT technology. The Company received financing
primarily from Texan institutional investors, including ATP Partners, LP (San
Antonio, TX), Scientific Health Development (Dallas, TX), Barshop Ventures (San
Antonio, TX), the State of Texas Emerging Technology Fund, the SCOUT Fund (Birmingham,
AL), as well as significant support from prominent local investors such as Charles
Martin Wender and Philip J. Romano (who financed the initial development of the
Palmaz(R) coronary stent developed at UTHSCSA).
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995. Any statements in this
news release regarding the CardioSpectra acquisition, Volcano's business and
technology, and CardioSpectra's business and technology that are not historical
facts may be considered "forward-looking statements," including statements regarding
the CardioSpectra acquisition, its expected benefits to Volcano and CardioSpectra,
the complementary nature of each company's technology and skill sets to the other,
the acquisition's anticipated timing, Volcano's long-term goals from the CardioSpectra
acquisition, the milestones under the CardioSpectra merger agreement and whether
they may be attained and to what extent, the features of CardioSpectra's technology
and its potential, and CardioSpectra's expected timing for filing for regulatory
approvals. Forward-looking statements are based on management's current preliminary
expectations and are subject to risks and uncertainties, which may cause Volcano's
results to differ materially and adversely from the statements contained here.
Some of the potential risks and uncertainties that could cause actual result
to differ from the results predicted are detailed in the company's annual report
on Form 10-K, quarterly reports on Form 10-Q and other filings made with the
Securities and Exchange Commission. Undue reliance should not be placed on forward-looking
statements, which speak only as of the date they are made. Volcano undertakes
no obligation to update any forward- looking statements to reflect new information,
events or circumstances after the date they were made, or to reflect the occurrence
of unanticipated events.
Source: Volcano Corporation
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