Company will also use the SPR analysis technology to develop other diagnostics.

China Medical Technologies will acquire Molecular Diagnostics Technologies’ HPV-DNA biosensor chip and surface plasmon resonance (SPR) based analysis system for about $345 million. The fee will be paid in installments with the final payment to be made one year after the closing of the acquisition, which is expected in December 2008 or January 2009.

The HPV chip is a label-free DNA chip for the diagnosis of HPV infection and genotyping of HPV. It can reportedly identify 24 HPV genotypes including 16 high-risk genotypes and eight low-risk genotypes. It can also identify mixed HPV infection and can be used to guide individual therapy and vaccination, according to China Medical Technologies.

The HPV-DNA biosensor uses the SPR system for analysis. China Medical Technologies plans to develop more products on the SPR system for the detection of biomarkers related to infectious diseases, cancers, cardiovascular disorders, and immune system disorders.

The company expects the acquisition to contribute to revenues in the first quarter of fiscal 2009, or second calendar quarter of 2009. Revenues from the HPV chip will range from RMB160 million, or $23.47 million, to RMB180 million, or $26.40 million, in fiscal 2009. The company further expects revenues from its IVD businesses to reach 80% of its total revenues in fiscal 2009.

“The acquisition satisfies all our acquisition principles: advanced IVD technology especially molecular diagnostic technology, high gross margin, huge market potential covering a large population of existing and potential users, and complementary and synergistic to our existing product offerings,” notes Xiaodong Wu, chairman and CEO of the China Medical Technologies. “Our direct sales network will expedite the process of introducing the HPV chip and the SPR system to our existing and potential large hospital customers.

“From the standpoint of cervical cancer development, HPV infects cervical cells, which results in genetic abnormalities such as TERC gene amplification,” Wu continues. “As such, we plan to bundle sales of the HPV chip with our specific FISH probes, which can effectively detect both HPV infection and TERC gene amplification to achieve early diagnosis of cervical cancer and to provide treatment guidance.

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