Full Press Release Details
PRO-DEX, INC. ANNOUNCES THE ACQUISITION OF INNOVATIVE
TECHNOLOGY IN DENTAL ANESTHESIA DELIVERY AND PAIN MANAGEMENT
SANTA ANA, CA, November 2, 2005 -
PRO-DEX, INC. (NASDAQ:
PDEX), a developer and manufacturer of embedded
motion control and miniature rotary drive systems, serving the medical, dental,
factory automation, and scientific research markets, today
announced that it has acquired certain assets related to the dental business of
IntraVantage Inc., the developer and marketer of intraosseous drug delivery
technology for medical and dental applications.
on the acquisition, Patrick Johnson, President and Chief Executive Officer
said, "Completing this transaction marks a new chapter in growth for Pro-Dex as
it is indicative of how we intend to utilize the infrastructure we have put into
place during the past three years, and leverage the profits and cash we have
generated to enable us to benefit from products we have recently developed. The
Intraosseous Anesthesia Delivery System is the latest technology in pain
management for the dental professional and represents a major breakthrough in providing
fear management for the anxious dental patient. Acquiring the technology related to a
product that we already exclusively manufacture will enable us to move one
level of distribution closer to the end-user, reducing the cost of the product
to the end-user while increasing the profitability of the product. The
promotion of the IntraFlow System fits seamlessly into our existing
sales and marketing efforts for branded dental products and as such, we expect revenue
growth from this product without a corresponding increase in expenses, and with
an incremental increase to profit contribution."
IntraFlow System is a one-step intraosseous (intraosseous meaning "within the
bone") technology that minimizes the facial numbness and patient discomfort,
during and after the dental procedure, which is normally associated with
delivering profound local anesthesia. The IntraFlow System
delivers effective, immediate anesthesia without the use of a traditional
hypodermic needle. For the first time, anesthetic can now be delivered via proven
intraosseous techniques, in a simple, one-step procedure providing immediate
pain relief and profound pulpal anesthesia in about one minute. Given the success of
the original IntraFlow Anesthesia Delivery System released in 2003, Pro-Dex was
engaged by IntraVantage to design a more compact, better performing and ergonomically
pleasing handpiece as the central component of the system. Pro-Dex subsequently
entered into an exclusive supply agreement with IntraVantage and began to
deliver handpieces to IntraVantage in March of 2005 as previously announced. IntraVantage
began selling the product in limited distribution in July of 2005, efforts that
will now be assumed and enhanced by Pro-Dex with the completion of this
transaction. In addition to the sale of the handpiece, Pro-Dex will also be
selling the disposable products related to the handpiece that are consumed with
each clinical procedure, creating a recurring revenue stream of approximately
paid approximately $1.1 million in cash to close the transaction with
additional cash payments of $400,000 to be paid over the next four years and
also expects to incur approximately $60,000 in extra-ordinary expenses related
to the completion of the transaction. In addition, Pro-Dex will pay IntraVantage
royalties on total net sales above pre-determined sales targets over the next
five years and has licensed back to IntraVantage the rights to develop and sell
non-dental products based on the acquired proprietary technologies. Sales of
the IntraFlow System are not expected to impact Pro-Dex's previously announced
revenue guidance as anticipated sales of the product to IntraVantage were
already included in previous guidance. In conjunction with this transaction,
Pro-Dex will be reversing approximately $300,000 in sales to IntraVantage
during the second fiscal quarter, sales that relate to product which was
returned to Pro-Dex at the close of the transaction. Pro-Dex will also reduce
its open order backlog by approximately $900,000 to eliminate all orders
currently in place from IntraVantage. Additionally, this adjustment is not
expected to unfavorably impact bottom-line earnings during the second quarter
and the remainder of the year as the impact on profit was previously addressed
through increased reserves for accounts receivable during the fourth quarter of
fiscal 2005 and the first quarter of fiscal year 2006.
to the Surgeon General, 80% of patients dislike going to the dentist because
they fear pain and do not like the lingering facial numbness caused by
anesthesia, stated Mr. Johnson. Patients who experience the IntraFlow System
say it provides immediate comfort without the side effects usually associated
with traditional syringe injections. With immediate onset, IntraFlow saves time
and clinicians may work on multiple quadrants of the mouth during a single patient
visit. Following treatment with the IntraFlow System, patients can resume
normal activities such as eating, drinking and talking, without having to wait
for the anesthesia to "wear off". While intraosseous anesthesia has been
historically perceived as a supplemental procedure to traditional syringe
delivered techniques, we believe that through effective education and
promotion, the IntraFlow System will be viewed as a primary means of
anesthesia, used in multiple quadrant restorative procedures and longer
endodontic treatments. Consequently, we see the potential for this product to
make significant inroads into a market where approximately 120 to 150 million
injections are given each year in the US alone and where there have been no
real broad-based innovations in dental anesthesia for decades."
Pro-Dex Inc., with operations in
Santa Ana, California and Beaverton, Oregon, specializes in bringing speed to
market in the development and manufacture of technology-based
solutions that incorporate embedded motion control and miniature rotary drive
systems, serving the medical, dental, factory automation, and scientific
research markets. Pro-Dex's products are found in hospitals, dental offices,
medical engineering labs, scientific research facilities and high tech manufacturing
operations around the world.
For more information, visit the Company's website at www.pro-dex.com.
herein concerning the Company's plans, growth and strategies may include
'forward-looking statements' within the context of the federal securities laws.
Statements regarding the Company's future events, developments and future
performance, as well as management's expectations, beliefs, plans, estimates or
projections relating to the future, are forward-looking statements within the
meaning of these laws. The Company's actual results may differ materially from
those suggested as a result of various factors. Interested parties should refer
to the disclosure concerning the operational and business concerns of the
Company set forth in the Company's filings with the Securities and Exchange