Biosensors Expands Its Horizons With Imaging Buy

Biosensors International (OTC:BSNRF) is not one of the biggest manufacturers of drug-eluting stents (DES), and though it has some innovative technology, it appears to have largely abandoned plans to contest the U.S. market. Instead it has turned eastwards, making inroads with its DES brands in China and Japan.

Its decision to acquire the California imaging company Spectrum Dynamics might herald a change of strategy. The $51m transaction will allow Biosensors to expand its product offering with devices that complement its stent business. And most importantly, Spectrum’s products are already on sale in the U.S.

As well as giving Biosensors a foothold in the U.S., Spectrum’s technology could be an asset in helping it get more traction in Europe and beyond.

Stent And Deliver

Only four companies have ever managed to get DES systems approved in the U.S.: Abbott (NYSE:ABB), Medtronic (NYSE:MDT), Boston Scientific (NYSE:BSX) and Johnson & Johnson (NYSE:JNJ). Biosensors has little chance of elbowing these groups aside. European and Asian markets are more open, though, and here Biosensors has a piece of the action, albeit amid much competition.

Biosensors’ flagship product is called BioMatrix Flex, and was approved in Europe in early 2010. It is an updated version of the company’s first DES, BioMatrix, which entered the market two years earlier. The device’s selling point is its bioresorbable polymer, designed to limit thrombosis compared with standard polymers.

This is typical of DES developers. The drug-coated devices outperform plain metal stents to an extraordinary degree, but once they became an established, therapy sales plateaued and manufacturers currently occupy themselves by churning out slightly tweaked versions of their old stents.

The Singapore-based company therefore plans to position Spectrum's functional imaging technology as a means to determine how patients would be best treated and to help position stents correctly, in the hope that this will give it an edge over its competitors. Spectrum says that its high-resolution 3D nuclear imaging technology is of particular benefit for obese people – a group that is, of course, at higher risk for the cardiac problems that necessitate stent placement.

The buy will have “minimal impact” on its fiscal 2014 financials, Biosensors says, and should be accretive to earnings in the following year.

The sales forces of the companies will be merged, and as Spectrum has staff in Europe and Japan as well as the U.S., this could give Biosensors’ ex-U.S. stent sales a bump. As for entering the U.S. market with its DESs, this prospect looks as remote as ever.