Endo Health Solutions said its HealthTronics subsidiary has agreed to sell its anatomical pathology business HealthTronics Laboratory Solutions (HLS) to Metamark Genetics for an undisclosed price.
Endo said the deal is among efforts to pursue strategic alternatives for HealthTronics, a national provider of urological and interventional oncology services and products. Endo said in June it would explore such alternatives as part of a restructuring it said was needed to refocus the company and enhance shareholder value, in part by reducing annual operating expenses by $325 million.
Endo acquired HealthTronics in 2010 for $223 million in cash plus the assumption of about $35 million in debt. But sales failed to meet expectations, and during the first half of this year HealthTronics saw revenue shrink 1% to $104.4 million. Worse, the FDA in May rejected a citizen petition by Endo to block approval of generic versions of pain treatment Opana® ER, which generated $299.3 million in sales for the company last year, down 22% from 2011—but which made only $114.3 million in the first half of this year, down 35% from the first six months of 2012.
Within weeks after the FDA’s decision, Endo disclosed that its CFO and COO were leaving the company. And the following month, Endo announced its restructuring, which included a planned 15% reduction in workforce and a refocusing on three core businesses: Qualitest generic drugs, branded pharmaceuticals, and American Medical Systems, a medical device maker focused on restoring pelvic health, and acquired by Endo in 2011 for $2.9 billion.
HLS provides anatomical pathology services primarily to the urology community. HLS’ pathology labs in Georgia and Pennsylvania provide laboratory and diagnostic services to urologists throughout the United States, with client practices in 41 states. The business also manages pathology laboratories for physician practice groups, provides administrative services to in-office pathology labs for practice groups, and provides pathology services to physicians.
Metamark specializes in developing prognostic diagnostic tests, using its proprietary multiplex proteomic platform Prognosis Determinants™. The tests are expected to yield insights into the molecular characteristics and risk profile of tumors, facilitating of early stage cancer diagnosis and therapy.
“We believe joining forces with HLS will be instrumental to our success as we commercialize ProMark™, Metamark’s prostate cancer test,” Shawn M. Marcell, the company’s president and CEO, said in a statement.
Metamark’s acquisition of HLS comes less than four months after its appointment of Marcell, an industry veteran who earlier served as general manager of Hologic’s wholly owned Lifecodes subsidiary, since acquired by Immucor.