Point-of-Care Testing gains ground with BD’s acquisition of Alverix

Posted by | January 7, 2014

In 2007, Alverix set out to revolutionize point-of-care (POC) testing–medical tests conducted in the doctor’s office, at a patient’s bedside, in a clinic or even in a patient’s home. POC testing offers convenience and swift results. But to be effective, the tests must be absolutely accurate. Alverix’s products, which leverage optoelectronics, offer portability and affordability yet they can also detect human error. Safeguard Scientifics recognized the significant market opportunity for Alverix right at the start.

Today, we’re proud to announce that BD (Becton, Dickinson and Company), a leading global medical company, acquired Alverix for $40 million. Safeguard expects to receive aggregate cash proceeds of $17.4 million, representing an approximate 1.9x cash-on-cash return. As part of the acquisition, $1.7 million will be held in escrow for about 18 months.

San Jose, Calif.-based Alverix and BD, based in Franklin Lakes, N.J., are well acquainted. Alverix–which creates hardware and software–is a key supplier to BD for its BD Veritor System™, which combines advanced particle and adaptive read technology in a compact reader. The system, which relays an objective interpretation of diagnostic results in about 10 minutes, can detect Flu A+B, Group A Strep, Adenovirus and Respiratory Syncytial Virus (RSV) in the doctor’s office.

Because the FDA heavily monitors medical diagnostics, some are wary about the future of medical diagnostics. According to the National Venture Capital Association and Dow Jones’ DJX VentureSource’s annual Venture View survey, 46 percent of the venture capitalists surveyed predicted that medical devices would be the most underfunded sector. Yet 57 percent predicted an increase in healthcare IT investments.

At Safeguard, we see the continued convergence of technology and diagnostics as yet another way to relay vital information, which is at the heart of healthcare IT. BD’s acquisition of Alverix only proves that this sector has enormous potential.

That potential increases when the population faces an immediate healthcare challenge. For the week of December 22-28, for instance, the number of people seeing their healthcare provider for influenza-like illness was above the national baseline for the fifth consecutive week, according to the Centers for Disease Control and Prevention. All 10 monitored regions reported flu activity at or above their region-specific baseline level. A quick flu diagnosis is vital to contain the outbreak. It’s particularly crucial in areas with vulnerable populations, such as the elderly or patients with a compromised immune system.

Changes in healthcare legislation that emphasize affordable, accountable yet quality care will also raise the demand for swift, accurate diagnostics.

Patients who can run routine tests at home or in a walk-in clinic won’t occupy precious time in a private practice, and these easy-to-use tests can help patients and physicians take the necessary preemptive steps as soon as possible. Insurance companies can monitor all this information to keep healthcare costs in check or pinpoint issues.

And like telemedicine, another growing IT area, medical diagnostic products are a boon in rural areas or Third World countries that lack sufficient healthcare services. Specialists in cities across the world can access the diagnostic information in real time.

The ever-growing demand of cloud-based programs and services will only boost the possibilities for medical diagnostic platforms and products. Just last week, Safeguard announced that PTC acquired another partner company, ThingWorx, for $112 million. ThingWorx created the first application platform that lets designers build and run Internet of Things (IoT) and Machine-to-Machine (M2M) applications. ThingWorx too has made headway into the medical diagnostics space with Biocartis.

Judging by the success of these two deals for Safeguard shareholders and our partner companies, 2014 is off to an amazing and productive start.

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