A capital transaction

BERLIN—Eckert & Ziegler Strahlen-und Medizintechnik AG, specialists in radioactive pharmaceuticals and their production technology, has agreed to acquire Bioscan Inc.'s radiopharmaceutical equipment business, according to an agreement the companies announced last month.

The transaction involves both analytical instruments used in quality assurance of radioactive pharmaceuticals and automated radiopharmaceutical synthesis units—specifically, analytical instruments include radio imaging scanners, monitoring and detector systems. Radiochemistry lines comprise synthesis modules for labeling of various PET imaging agents/tracers. Excluding facilities, products, product line-related assets and staff necessary to conduct and successfully continue the business are part of the deal.

Eckert & Ziegler Radiopharma board member, Dr. André Hess, states that "the products we have acquired ideally enhance our developing equipment business and ensure we can offer our customers system solutions for the production and quality assurance of radiopharmaceuticals. By such an investment, we are broadening our commitment to the North American market."

Hess notes there is a great deal of activity among almost all market players in the development of new tracer compounds.

"Many of these compounds are currently in the last phases of clinical development and will soon become valuable products in the fields of oncology, cardiology and neurology," he says. "In particular, the tracers for neurodegenerative diseases address millions of people worldwide, and with a constantly growing life expectancy, the early and precise imaging procedures could help enhance patient care and aid researchers in identifying potential treatment candidates. Once these new radiopharmaceuticals are approved, the PET imaging and therapeutic market will offer higher resolution resulting in higher image quality, improved diagnostic accuracy and treatment planning/monitoring."

He also notes that approval of new proprietary tracers will drive large-scale manufacturing, distribution and support solutions for radiopharmaceuticals.

"We believe that this combination will trigger a rapid and considerable growth of the market worldwide. Eckert & Ziegler, as a provider of synthesis devices and technology, manufacturer and distributor of short-lived diagnostic tracers for PET imaging, as well as serving as a contract manufacturing partner for the pharmaceutical industry, deems itself well-positioned and prepared for these future challenges and opportunities," Hess states.

Bioscan estimates the analytical instrumentation market to be $7 million to $10 million in annual sales revenues and believes its market share is from 20 to 30 percent, with a 30 to 40 percent share in the United States. The radiochemistry synthesis market is thought to be $20 million to $30 million, with Bioscan holding a 3 to 4 percent share prior to the acquisition by Eckert & Ziegler.

"Bioscan has been a leading player in radioanalytic and radiochemistry instrumentation for more than 30 years. Over the past five years, the company has increasingly focused on its fast-growing molecular imaging business, which now represents 85 percent of our sales," says Alex Kleinman, vice president of marketing and business development for Bioscan.

He notes that imaging is growing at the rate of 30 to 40 percent per year and that the company is launching a new 360-degree tomographic imaging system soon.

"This transaction will enable Bioscan to increase investment in its rapidly expanding preclinical imaging product line. We are pleased to be able to entrust our radiopharmaceutical equipment business and the thousands of customers that use Bioscan radioanalytic and radiochemistry instruments every day to a market leader like Eckert & Ziegler," Kleinman adds.

Radiopharmaceuticals are used in positron emission tomography (PET) to ensure swift and accurate identification of cancerous tissue and neurodegenerative disease. A large number of radiopharmaceuticals are currently in the development pipeline and consequently the associated equipment market continues to grow.

In addition to its radiopharmaceutical synthesis equipment business, Eckert & Ziegler has several Fluorine-18 PET radiopharmaceutical production locations in Germany and also supplies research institutes worldwide with its Gallium-68 (PET) radionuclide generators for nuclear imaging. In addition to these radio-diagnostic products, Eckert & Ziegler also markets the EMEA approved product Yttriga, a Yttrium-90 precursor for numerous radiotherapeutic products.

Eckert & Ziegler operates worldwide and is the holding company for a number of specialized subsidiaries engaged in the processing of radioisotopes as well as the development, production and sales of isotope technical components, medical technical devices and related products. The group of companies has 550 employees worldwide and is among the largest providers of radioactive components for radiation therapy and nuclear medicine.