Inverness Medical agrees to acquire Clondiag chip technologies for cash, stock

By Ted A. Knutson

Washington, March 1 - Inverness Medical Innovations, Inc. said Wednesday it has agreed to buy 67.45% of Clondiag chip technologies GmbH for 318,502 shares of Inverness stock and $3.1 million in cash.

Clondiag, based in Jena, Germany, has developed a multiplexing technology for nucleic acid and immunoassay-based diagnostics.

In addition to the cash and stock, Inverness has agreed to settle $10 million of Clondiag obligations during the first quarter of 2006, primarily using cash.

Under the agreement, Inverness will acquire the remaining 32.55% of the stock of Clondiag on or about Aug. 1 for an additional $4.9 million based on current exchange rates.

The purchase agreement also calls for contingent consideration totaling $8.9 million, consisting of 224,316 shares of common stock and about $3 million of cash or stock, in the event that 4 specified products are developed on Clondiag's platform technology.

Inverness said the technology which Clondiag has pioneered presents a new opportunity to develop highly sensitive and specific nucleic acid probe and immunological tests, which are available only in the clinical laboratory, for rapid point-of-care applications.

The rapid tests widely available today, which rely on immunology, provide a positive response significantly later in the development of a disease than do nucleic acid probe-based tests. This technology is expected to be applicable to a broad range of tests for both infectious disease and cardiology.

"We have been working with Clondiag for some months, checking the applicability of its technology to point-of-care diagnostics and have concluded that it offers us a significant new opportunity to develop easy-to-use rapid tests with far higher performance characteristics than are available using today's lateral flow platforms. We expect to build a significant patent portfolio in this very exciting area and the products to be developed fit naturally into our distribution system," said Ron Zwanziger, chief executive officer of Inverness, in a press release.

Inverness Medical Innovations is a Waltham, Mass.-based developer of advanced diagnostic devices.

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