Healthcare Industry News: endoscopy
News Release - February 20, 2012
Theragenics Acquires Core Oncology’s Prostate Brachytherapy Customer BaseSubstantial Increase to Theragenics’ Share of Iodine-125 Market Segment is Expected
$5 million to $6 million of incremental revenue expected in brachytherapy segment for remaining portion of calendar 2012
Expected to be accretive to earnings and to generate positive operating cash flow in 2012
Total earn-out based purchase price is expected to be approximately $7.5 million to $10.5 million, which is based on anticipated revenue in the earn-out period of $10 million to $13 million from the acquired customers, adjusted for a $2.5 million threshold amount.
Core’s prostate brachytherapy sales were approximately $13 million for their fiscal year ended June 30, 2011 and $4 million for the six months ended December 31, 2011.
BUFORD, Ga.--(Healthcare Sales & Marketing Network)--Theragenics Corporation® (NYSE: TGX ), a medical device company serving the surgical products and prostate cancer treatment markets, today announced that it has purchased Core Oncology’s prostate brachytherapy customer base. The asset acquisition was effective on February 17, 2012. The total purchase price is structured as an “earn-out” equal to one times the actual revenue generated from the acquired customers over the twelve month period beginning September 2012 and ending August 2013 in excess of a $2.5 million threshold amount. Theragenics paid $3.8 million in cash at closing as prepayment of a portion of the earn-out, and will make quarterly earn-out payments thereafter. The Company expects to fund the quarterly earn-out payments from operating cash flow and existing cash balances.
“The Core transaction and additional iodine business demonstrates our continuing commitment to this treatment, the physicians and the patients who depend on it,” said M. Christine Jacobs, Chairman and Chief Executive Officer of Theragenics Corporation. “The Core customers are in good hands.”
Travis Gay, Chief Executive Officer of Core Oncology, stated, “Theragenics has been recognized as a leader and has been a valued partner of Core’s. I am confident that Theragenics will continue the outstanding quality and service to which the Core customers and patients they serve have grown accustomed.”
Ms. Jacobs concluded, “Theragenics is a leading manufacturer and provider in the prostate brachytherapy market. Our legacy is improving lives and curing cancer. This transaction enhances the mission and expands our reach.”
Theragenics will host a conference call on Thursday, February 23, 2012 at 11:00 a.m. Eastern Time to discuss this transaction along with 2011 results. To access the call, dial 877-407-4019 or 201-689-8337. This call is also being broadcast live over the Internet, and a recording will be available for one month on our website. To access the webcast, log on to www.theragenics.com and select Investor Relations followed by selecting “Company Presentations.” You can also access a phone replay of the call until midnight, March 1, 2012 by dialing 877-660-6853 or 201-612-7415, and entering the account # 372 and replay ID 387823.
Theragenics Corporation (NYSE: TGX ) operates two business segments: its surgical products business and its brachytherapy seed business. The surgical products business (www.cpmedical.com, www.galtmedical.com, www.needletech.com) manufactures and distributes wound closure, vascular access, and specialty needle products. Wound closure products include sutures, needles and other surgical products. Vascular access includes introducers, guidewires and related products. Specialty needles include coaxial, biopsy, spinal and disposable veress needles, access trocars, and other needle-based products. The surgical products segment serves a number of markets and applications, including, among other areas, interventional cardiology, interventional radiology, vascular surgery, orthopedics, plastic surgery, dental surgery, urology, veterinary medicine, pain management, endoscopy, and spinal surgery. Theragenics’ brachytherapy business manufactures, markets and distributes “seeds” used primarily in the minimally invasive treatment of localized prostate cancer. The Company’s brachytherapy product line includes its palladium-103 TheraSeed® device (www.theraseed.com), and the iodine-125 based device I-Seed, both of which are used primarily in the minimally invasive treatment of localized prostate cancer. The terms "Company", "we", "us", or "our" mean Theragenics Corporation and all entities included in our consolidated financial statements. For additional information, call our Investor Relations Department at (800) 998-8479 or visit www.theragenics.com.
This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, the accuracy of which is necessarily subject to risks and uncertainties, including, without limitation, statements regarding expected incremental brachytherapy segment revenue, expected total purchase price and the expected effect on earnings and cash flow. Actual results may differ materially due to a variety of factors, including, among other things, competition from other companies within the brachytherapy market and from other methods of treatment, effectiveness and execution of marketing and sales programs, ability to retain customers, changes in product pricing, changes in the ordering patterns of our customers, continued acceptance of and demand for our products by the markets in which we operate, introduction and/or availability of competitive products by others, potential changes in third-party reimbursement, including Medicare reimbursement as administered by the Centers for Medicare and Medicaid Services (CMS), implementation of new legislation by CMS, physician training, third-party distribution agreements, legislative changes to healthcare markets and industries such as the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (including provisions such as the medical device tax), and other factors set forth from time to time in our filings with the Securities and Exchange Commission.
All forward looking statements and cautionary statements included in this document are made as of the date hereof based on information available to us as of the date hereof, and we assume no obligation to update any forward looking statement or cautionary statement.
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