Duravest acquires controlling interest in Bio-Magnetic Therapy Systems
30 November 2005
Frankfurt, Germany. Duravest, Inc. has completed an agreement to acquire
a controlling stake in Bio-Magnetic Therapy Systems, Inc. (BMTS). BMTS is a
German-US medical technology firm dedicated to the safe, non-invasive
treatment of osteoarthritis, osteoporosis and orthopedic injuries using its
innovative and patented "Pulsed Signal Therapy" (PST) system. This delivers
a unique pulsed electromagnetic signal that has been shown to stimulate the
healing of connective tissue (cartilage, tendons, ligaments and bone)
injuries.
These electromagnetic pulses mimic (without any discernable side-effects)
the body's own natural signals that in the absence of pathology would
otherwise stimulate connective tissue growth and repair. The PST system has
been extensively validated by more than 25 clinical studies and 60 peer
reviewed publications worldwide; in addition, 51 international patents are
currently in force that cover all the essential technical innovations as
well as current and future treatment indications for PST. To date more than
300,000 patients have been treated using proprietary CE-Mark approved and
ISO-9000 certified equipment with a documented clinical success rate of over
75%.
BMTS has reported audited 2004 revenues of $7.5M with an associated
EBITDA of $0.76M and net income of $0.87M. Over the past two years revenue
growth has exceeded a 35% average annual growth rate. The Duravest
acquisition and accompanying investment will help accelerate BMTS'
historical earnings growth by enabling the company's strategy to
internationalize the distribution network. The BMTS market is presently well
established in Germany and sales will be expanded to include Benelux,
France, Spain, Scandinavia and Italy in 2006 and Asia in 2007/2008.
Investigational Device Exemption (IDE) status has already been granted by
the U.S. FDA to BMTS and the company plans to achieve FDA approval in 2008.
Dr. Ogan Gurel, CEO of Duravest, Inc., commented that "the acquisition of a
controlling interest in BMTS is a significant milestone in the advancement
of Duravest's mission and business strategy. This non-invasive, safe and
strongly patented technology is a breakthrough in the treatment of
musculoskeletal disorders and associated pain management. Furthermore, this
enhancement of the Duravest portfolio to include BMTS — a company with
outstanding earnings growth potential, an impeccable balance sheet, no bank
debt and both historical and projected positive cash flow — will
substantially bolster Duravest's financial strength and its ability to
deliver new treatments for patients and increased value to shareholders for
many years to come."
As part of the acquisition transaction, active discussions with Dr. Rolf
Kaese to replace the scientific founder Dr. Richard Markoll as Chief
Executive Officer of BMTS have been accelerated. Dr. Kaese was previously
CEO of Impella CardioSystems AG at which he successfully restructured the
company, obtained EUR 17M in venture capital investment, introduced four new
products in Europe and led the sale of the company to Abiomed — the leader
in cardiovascular circulatory support technologies — for $65M in April,
2005.
Dr. Kaese remarked: "I am very much looking forward to filling the CEO
role at BMTS in the very near future. Personally, I am absolutely convinced
that the BMTS technology will be a critical part of the armamentarium of
safe, efficient pain management and treatment for a number of orthopedic
conditions. I am also very excited to be associated with the innovative team
at Duravest and am looking forward to potentially joining the Duravest Board
of Directors."
Dr. Gurel also added that: "In addition to Dr. Kaese's upcoming
leadership of BMTS, his industry-leading background and outstanding
experience in the cardiovascular device sector will also provide Duravest
with invaluable expertise, scientific input, and industry contacts towards
the development and commercialization of our other cardiac-related
technologies in our portfolio."
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