Varian Medical Systems, Inc. and Calypso Medical Technologies, Inc., today announced they have signed a definitive agreement under which Varian will acquire Calypso, a privately-owned, Seattle-based developer and supplier of specialized products and software for real-time tumor tracking and motion management during radiosurgery and radiotherapy. The acquisition, which is anticipated to close in early October subject to the satisfaction of certain closing conditions, provides that Varian will pay approximately $10 million for Calypso plus potential earnouts based on unit sales of Calypso products achieved beyond thresholds over the next 30 months.
"With Calypso's technology, Varian will be able to offer cancer treatment centers real-time, non-ionizing tumor tracking tools for enhancing the precision of their treatments," said Timothy E. Guertin, president and CEO of Varian Medical Systems. "These products are a perfect complement for Varian's motion management technology, including our TrueBeam™ platform, respiratory gating and dynamic imaging tools for highly focused radiosurgery. These products should enhance Varian's growth as we integrate them and make them more broadly available to the clinical community through our global marketing and sales channels."
The Calypso® System features GPS for the Body® technology and Beacon® electromagnetic transponders that together currently provide a solution to continuously and accurately track target location to improve precision of prostate cancer treatments. The transponders are implanted into the prostate or prostatic bed and then tracked with the 4D localization and tracking system so that beams can be precisely delivered to targeted tumors during radiotherapy and radiosurgery with medical linear accelerators such as Varian's TrueBeam platform. "The confidence gained from this system supports accelerated, hypofractionated treatments of the prostate where dose escalation requires confirmation of target location at all times," said Guertin. "We believe this technology could support a change in clinical practice to broader acceptance and use of radiosurgery for treating prostate cancer."
The U.S. Food and Drug Administration (FDA) also has granted Calypso investigational device exemption (IDE) approval for its clinical study evaluating real-time tracking of lung cancer tumors during radiation delivery. This study utilizes a proprietary transponder that includes an anchoring feature uniquely designed to lock into lung tissue to support very precise radiosurgery procedures. "If cleared by regulatory authorities, we are optimistic that this will globally impact the ability to target challenging lung tumors with accuracy and precision required to advance clinical outcomes," said Guertin.
"We are extremely gratified by the confidence and promise of this acquisition by Varian. It provides a tremendous opportunity to leverage our GPS for the Body technology as broadly as possible," said Edward Vertatschitsch, Ph.D., president and CEO of Calypso Medical. "Motion management is critical to accurately targeting the cancer so patients can experience the curative benefits of radiation therapy while protecting adjacent healthy tissue. We believe our real-time tracking capabilities will help to close the gap on this clinical challenge and I look forward to joining the Varian team to advance innovations in these areas."
"We are looking forward to having some of the world's technical thought leaders in tumor tracking from Calypso join with us so that we can work together to develop and deploy this technology for more disease sites." Guertin added.
The Calypso business currently generates more than $15 million in annual revenues from sales and service of its products. Calypso currently has an installed base of more than 110 systems in North America and Europe. The tracking system has been used in the treatment of an estimated 10,000 patients for cancer of the prostate.
It is expected that the Calypso business will be integrated into Varian's Oncology Systems segment and will continue to operate in Seattle. Including transaction and integration costs, Varian anticipates that the Calypso acquisition will be slightly dilutive to earnings per diluted share in fiscal year 2012. The acquisition includes Calypso's intellectual property portfolio with some 90 current or pending patents.
About Varian Medical Systems
Varian Medical Systems, Inc., of Palo Alto, California, is the world's leading manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, and brachytherapy. The company supplies informatics software for managing comprehensive cancer clinics, radiotherapy centers and medical oncology practices. Varian is a premier supplier of tubes and digital detectors for X-ray imaging in medical, scientific, and industrial applications and also supplies X-ray imaging products for cargo screening and industrial inspection. Varian Medical Systems employs approximately 5,700 people who are located at manufacturing sites in North America, Europe, and China and approximately 70 sales and support offices around the world. For more information, visit http://www.varian.com or follow us on Twitter.
About Calypso Medical Technologies, Inc.
Calypso Medical is a privately held medical device company headquartered in Seattle. Its proprietary tumor localization system is designed for body-wide cancers commonly treated with radiation. Utilizing miniaturized, non-ionizing implanted devices called Beacon electromagnetic transponders, the Calypso System continuously and accurately tracks the location of cancerous tumors for the improved precision and safe management of radiation for cancer treatment. The real-time position and motion information provided by the Calypso System offers objective reassurance that radiation treatment is delivered precisely to the prescribed target and not to surrounding healthy tissue, thereby improving safety and eliminating unnecessary radiation exposure to patients. Additional information can be found at www.calypsomedical.com.
Forward Looking Statements:
Except for historical information, this news release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning industry and market outlook, including customer demand and acceptance of products or technology for radiotherapy and radiosurgery; the outlook for certain geographic regions and markets; growth drivers; the outlook for our orders, sales, backlog, or earnings growth; future financial results and any statements using the terms "will," "expect," "anticipates," "enable," "should," "plans," or similar terms are forward-looking statements that involve risks and uncertainties that could cause our actual results to differ materially from those anticipated. Such risks and uncertainties include the ability to effectively integrate the products of Calypso into our product offerings and sales and marketing operations; the ability to retain the services of key Calypso personnel; demand for our and Calypso's products; our ability to develop and commercialize new products or new indications for commercially available products; the impact of competitive products and pricing; our ability to maintain or increase operating margins; our ability to protect our intellectual property; the risk of operations interruptions due to events beyond our control; and the other risks listed from time to time in our filings with the Securities and Exchange Commission. We assume no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.
