ICU Medical Inc., a midsize, San Clemente-based medical device maker, is an appealing takeover candidate, according to an article on the Motley Fool investor website.
ICU makes needleless intravenous connectors, medical devices to protect healthcare workers from chemotherapy drugs and other products. Its primary product is the Clave, which prevents patients from getting blood-borne infections and healthcare workers from accidental finger pricks.
Writer Sean Williams wrote that he picked ICU as one of his “10 small-caps to rule them all” back in May and noted the company has “consistent growth and tons of cash.”
“ICU has generally made a habit of crushing analyst estimates and boasts an immaculate balance sheet ripe with $119 million in cash and no debt,” Williams said.
He suggested ICU would be the “perfect acquisition target” because it already has a relationship with a potential buyer—Lake Forest, Ill.-based device and drug maker Hospira Inc.
“Ironically, ICU purchased its current critical care line from Hospira in 2009, but it’s the two distribution agreements with Hospira that ICU recently extended through 2018 that make the match so perfect,” Williams said.
ICU already makes custom-infusion intravenous sets that Hospira sells under the SetSource brand name, and Hospira almost exclusively uses the Clave and ICU’s oncology products.
“The potential savings on Hospira’s end in purchasing ICU Medical would be the catalyst of any deal. ICU likely won’t come cheap, but it might make sense for Hospira in the long run,” Williams said.
ICU was joined by San Diego-based DexCom Inc. which makes the Seven Plus diabetes sensor, as a company to watch in Williams’ report. Williams wrote that DexCom could be bought by New Brunswick, N.J.-based medical conglomerate Johnson & Johnson, which is working with DexCom to develop a continuous-glucose-monitoring- enabled insulin pump.
Green Building
ACS Development Group Inc. of Irvine has started work on 2 Journey, a $10 million medical office building with about 21,000 square feet of usable space, in Aliso Viejo off the San Joaquin Hills (73) Toll Road.
2 Journey took a while to get under way because of several outside challenges, said Fred Alaghband, owner of ACS.
“Normally, our projects take about a year to get the entitlement and permits and start construction,” Alaghband said. “Of course, we ran into the financial crisis. Financing was a problem.”
Specifically, ACS found that financers wanted projects to be preleased before lending money, which was a departure from past practices.
“Basically, the banks put stops on all development,” Alaghband said. “As you know, there (are) not a whole lot of privately financed projects going on unless you have owner-build, owner-occupied.”
The breakthrough came when ACS was able to sign three preleases for about a third of the building and secured financing from Commercial Bank of California, Alaghband said. But preleasing presents its own set of challenges, because doctors can’t see the building before deciding to lease space.
2 Journey is scheduled to open in this year’s fourth quarter. It has two tenants who will become partners—Manish Marolia, a pediatrician, and pediatric dentist Moni Mosharaf.
Alaghband said he is still seeking more tenant-partners, including a group that would have an outpatient surgery center in the building.
2 Journey is touted as an environmentally sensitive “green” building, with features such as solar panels and covered parking.
Allen Basso and Kurt Bruggeman, senior vice presidents in Lee & Associates Commercial Real Estate’s Irvine office, are handling 2 Journey’s marketing and leasing. LPA Inc. of Irvine designed it.
Reverse Medical Sells Business
Irvine medical device maker Reverse Medical Corp. said it sold its line of neurovascular guide catheters to Covidien PLC, a large medical device maker, on unspecified terms.
Reverse will retain possession of medical devices used in thrombectomies and continue developing devices for treating neurovascular disorders such as ischemic and hemorrhagic stroke.
Med Focus Fund, founded by longtime Orange County medical device entrepreneur Michael Henson, established Reverse in 2007.
Covidien, which operates out of Massachusetts, has made other buys of Orange County device makers in recent years, including a $2.3 billion purchase of vascular device maker Ev3 Inc. in 2010.
Bits and Pieces
St. Jude Medical Center, a unit of Orange-based St. Joseph Health System, recently opened Synergy at St. Jude Centers for Rehabilitation and Wellness on Imperial Highway in Brea. Services include specialized fitness classes for new mothers and senior citizens, massage therapy, wellness coaching and nutritional counseling. … Donald Fowler is the new president of Toshiba America Medical Systems Inc., a Tustin-based unit of Toshiba Corp. in Japan.
