iCAD, Inc. To Acquire Assets of CAD SCIENCES
Under the terms of the agreement, iCAD will pay $2 million in cash and $3 million in shares of iCAD common stock. The number of shares issued will be calculated using the average closing price for the 10 consecutive trading days immediately preceding the closing. This synergistic business transaction is projected by iCAD to add approximately $500,000 to its quarterly operating expenses through the balance of 2008, and the transaction is expected to close early in the third quarter of 2008, subject to certain pre-closing conditions.
CAD Sciences develops and distributes pharmaco-kinetic based CAD products that aid in the interpretation of contrast enhanced Magnetic Resonance Imaging (MRI) images of the breast and prostate. Products are also under development by CAD Sciences for therapy monitoring, for the identification of vascular diseases using contrast enhanced Magnetic Resonance Angiography (MRA), and for cancer detection using contrast enhanced Computed Tomography (CT). CAD Sciences has established clinical relationships at leading hospitals and teaching institutions worldwide with installations at Duke University, Massachusetts General Hospital, Johns Hopkins Hospital, University of Nijmegen (The Netherlands), University of Vienna (Austria), and the Universities of Essen and Cologne (Germany).
"This transaction fits perfectly with our strategic growth plan to expand iCAD's leadership position beyond mammography CAD. MRI and CT are demonstrating significant advances in the imaging sector. We believe our ability to offer outstanding image analysis and clinical decision support solutions for MRI and CT imaging will expand iCAD's ability to address the most prevalent cancers. Helping clinicians find these cancers earlier, faster and with greater confidence where awareness, early detection and monitoring are critically important and should further strengthen and broaden our market position," said Ken Ferry, President and CEO of iCAD.
"The technology platforms of our two companies are highly complementary and have the potential of delivering the most accurate detection and workflow solutions available in the imaging industry," he added. "We also see significant synergy regarding customer call points, providing our sales team with additional products to sell."
"We are proud to have developed this leading CAD technology for breast and prostate MRI and believe that its adoption by physicians will be accelerated by iCAD's strong market position in mammography CAD," said Ray Joslin, Chairman and CEO of CAD Sciences.
Key Strategic Benefits
Advantages iCAD anticipates in association with this transaction include the following:
-- Strengthens iCAD's leadership position through a broader portfolio of advanced image analysis and workflow solutions for the early detection of the most prevalent cancers including breast, colon, prostate and, in the future, lung cancer. This will extend iCAD's reach in the largest imaging modalities of Computed Tomography and MRI in addition to its expertise in film-based, digital radiography, and computed radiography.
-- Leverages existing call points for iCAD's sales and marketing teams enabling a rapid integration.
-- Increases the potential of an expanded relationship with OEM partners who manufacture and market MRI systems through direct integration of these solutions.
-- Expands iCAD's global presence and increases its leadership position abroad by building upon a larger international business and leveraging new opportunities with global partners.
-- Extends iCAD's technological expertise and product development initiatives with the inclusion of a more robust pharmaco-kinetic technology, FTP. FTP is a second-generation algorithm that uses near continuous data sampling versus the prior generation that uses only three fixed time points, which may omit critical data from the analysis.
-- Complements iCAD's core competency in morphology based CAD solutions providing a platform for next-generation products delivering both kinetics and morphology technology in a single CAD solution.
-- Augments iCAD's product-development initiatives for CT solutions for the early detection of colon and lung cancer.
About Breast MRI
-- Breast MRI received FDA clearance in 1991 for use as an adjunct to mammography. New guidelines were released by the American Cancer Society (ACS) and published in the March/April 2007 CA: A Cancer Journal of Clinicians, recommending MRI for screening women at high risk for breast cancer. The guidelines recommended MRI scans for women with a lifetime risk of breast cancer of 20%-25% or greater, including women with a strong family history of breast or ovarian cancer and women who were treated for Hodgkin's disease. This recommendation was a major step toward moving breast MRI into the clinical mainstream of screening for high-risk women.(1)
-- The use of MRI in the management of breast cancer has doubled since 2003, from 314,000 to 645,000 procedures as reported in a study published this month by IMV Medical Information Division of Des Plaines, IL.(2)
MRI scans are more effective than other screening modalities in the following cases:
-- Screening women with dense breasts, breast implants and breast implant ruptures -- Screening women with a family history of breast cancer -- Screening women at risk of breast cancer recurrence -- Biopsy support when lesions are difficult to detect by other modalities -- Staging of diagnosed breast cancer -- Locating a primary tumor in women with breast cancer that has spread to the lymph nodes -- Detecting tumor recurrences and residual tumors post-lumpectomy -- Assisting in determining extensive surgical resection (lumpectomy or mastectomy) -- Showing the effectiveness in contra-lateral (opposite) breast cancer detection and multi centricity
(1) AuntMinnie.com Staff Writers, March 28, 2007
(2) AuntMinnie.com, June 5, 2008, by Cheryl Hall Harris, R.N., Contributing Writer
About iCAD, Inc.
iCAD, Inc. is an industry-leading provider of Computer-Aided Detection (CAD) solutions that enable healthcare professionals to better serve patients by identifying pathologies and pinpointing cancer earlier. iCAD offers a comprehensive range of high-performance, upgradeable CAD systems for the high, mid and low volume mammography markets. iCAD is entrusted with the task of early cancer detection by more than 2,200 women's healthcare centers worldwide. For more information, call +1 877 iCADnow or visit www.icadmed.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
Certain statements contained in this News Release constitute "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the risks of uncertainty of patent protection, the impact of supply and manufacturing constraints or difficulties, product market acceptance, possible technological obsolescence, increased competition, customer concentration and other risks detailed in the Company's filings with the Securities and Exchange Commission. The words "believe", "demonstrate", "intend", "expect", "estimate", "anticipate", "likely", and similar expressions identify forward- looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. The Company is under no obligation to provide any updates to any information contained in this release.
Source: iCAD, Inc.