The ranks of Orange County’s publicly traded healthcare companies, which have been thinned out by several large deals in recent years, got a little smaller last month.
That’s when InSight Health Services Holdings Corp. of Lake Forest emerged from bankruptcy protection as a privately held company with new ownership.
With just a small group of shareholders, the medical imaging company no longer needs to be public, according to Chief Executive Kip Hallman.
Before the restructuring, InSight was a low-profile public company whose shares were lightly traded on the Pink Sheets exchange.
InSight said it eliminated nearly $300 million of debt in its bankruptcy proceedings.
Earlier, Hallman said the reorganization would leave InSight “effectively debt-free, which is a really nice place to be.”
The company, which operates in more than 30 states and has yearly revenue of about $200 million, filed for bankruptcy protection in December, the second time it had done so since 2007.
Black Diamond Capital Management LLC, a Lake Forest, Ill.-based company with more than $5 billion in assets, is InSight’s new majority owner.
With the reorganization done, InSight is looking to grow on its own and through deals, Hallman said. It’s looking at opening more imaging centers, providing more mobile scanning services and offering imaging services to hospitals on a contract basis.
InSight was formed in 1996 through the combination of Newport Beach’s American Health Services Corp. and Texas-based Maxum Health Corp., a pair of publicly traded diagnostic imaging companies.
It went private in 2001 after being bought by J.W. Childs Associates LP of Boston and Washington, D.C.-based Halifax Group LLC.
In 2007, the company went through bankruptcy and traded 90% of its common stock to bondholders, who in turn forgave $195 million worth of debt due this year.
Medical Device Tax
Several local Republicans in the House of Representatives have signed on to an effort to repeal a pending $20 billion, 10-year tax on the sales of medical device makers.
Among the co-sponsors of HR 436, titled the “Defend Medical Innovation Act,” are John Campbell, who represents Irvine and parts of Newport Beach and South County; Edward Royce, who represents part of North County; Ken Calvert, who represents part of South County; and Gary Miller, who represents northern, eastern and southern parts of the county.
Minnesota Rep. Erik Paulsen, a Republican, is the main sponsor of HR 436, which he originally introduced last year and brought back in January.
Paulsen argues that the tax, which will go into effect in 2013, would harm job growth, slow innovation and raise costs.
The tax, which came about as a way to pay for healthcare reform, originally was slated to raise about $40 billion over 10 years.
A lobbying effort that included AdvaMed, a Washington, D.C. trade group that has several of OC’s big device bosses in leadership positions, reduced it.
Spectrum Cancer Drug
Irvine drug developer Spectrum Pharmaceuticals Inc. said the Food and Drug Administration is scheduled to decide in November on whether to remove a required pre-treatment for its Zevalin cancer drug.
Spectrum is seeking regulatory approval for Zevalin as a first-line of treatment for patients with the blood cancer non-Hodgkin’s lymphoma. Zevalin now is approved for treating non-Hodgkin’s lymphoma when other drugs have failed.
Removing an imaging evaluation requirement, which is known as the bioscan, was a priority of Spectrum as part of seeking a wider use for the drug.
Earlier, Spectrum said many doctors who use the drug didn’t believe that the bioscan, which allows a doctor to follow the drug as it travels through a patient’s body, was a necessary complement to the Zevalin treatment.
Masimo Deals
Masimo Corp., an Irvine maker of patient monitoring devices, signed a licensing deal with China’s Royal Fornia Electronic Device Co. The deal calls for Masimo to put its Rainbow SET pulse co-oximetry technology into patient monitors made by Royal Fornia.
Masimo said in a release that Royal Fornia becomes one of the first Chinese device makers to use its non-invasive measurement technology.
Separately, Masimo said the Mater Children’s Hospital in Brisbane, Australia, began using its Masimo Rainbow SET non-invasive patient monitor.
The device allows the hospital to non-invasively monitor substances such as hemoglobin, a protein that’s found in blood, as well as oxygen levels in the bloodstream.
Bits and Pieces
Tustin-based Epinex Diagnostics Inc. said that glycated albumin, the active ingredient in its G1A Rapid Diabetes Monitoring Index test, was presented as a novel biomarker for monitoring the disease at a recent seminar of the American Association for Clinical Chemistry … Auxilio Inc., a Mission Viejo company that helps hospitals and other healthcare providers cut their dependence on paper records, said it extended a five-year contract with Saint Barnabas Health Care System in New Jersey … Aliso Viejo-based MedDraft Debt Prevention Services said it launched a website that allows healthcare providers to take online payments from their patients.
