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Mobility product company acquires biotech

Modern Mobility Aids Inc, a company producing and marketing mobility aids, has acquired Canadian molecular diagnostics company LumiGene

Modern Mobility Aids Inc, a company that produces and markets mobility aids, including scooters, wheelchairs and canes, has acquired Canadian molecular diagnostics company LumiGene Technologies Inc, amid plans for the former company to expand into the biopharmaceutical sector. Financial details of the deal have not been announced.

LumiGene is developing point-of-care DNA testing products, to aid in the fast and effective diagnosis and treatment of infectious disease. The company's POSiChek system automates the process of preparing and amplifying DNA, allowing diseases and pathogens to be detected in just 30 to 60 minutes.

This is a dramatic new direction for Modern Mobility, whose new business direction comes as a result of recent changes to the company's corporate infrastructure. In May, Sergei Khorolski (former president, chief executive officer and a director of the company) and Valeri Politika (formerly the chief financial officer, secretary, treasurer and director of the company) sold 6.5m shares of common stock of the company to Mohamed K. Karatella (current president, chief financial officer and treasurer). After the sale of shares, Mr Karatella and Antonio Domingues (current secretary) were then appointed to the board of Modern Mobility, ahead of Mr Khorolski's and Mr Politika's resignations from the board and as officers of the company.

In light of these infrastructure changes, Modern Mobility has formed a new business model and now plans to direct its focus on the pharmaceutical and biotechnology industries. To achieve this, the company plans to implement an aggressive campaign to seek out and research companies from early developmental stages to mezzanine levels in the research and development, manufacturing and distribution markets, within these industry sectors.

Over the last decade, mergers and acquisitions (M&As) between pharma/biotech and medical device companies have become much more commonplace. However, this type of M&A is not always successful. For instance, back in 2006, Johnson & Johnson's proposed $24bn takeover of device manufacturer Guidant dramatically fell apart, more or less signalling the end of the 'mega-merger' period. Within the pharma sector, however – particularly in light of patent expiries and the continued failure to discover a new blockbuster – diversified companies (such as Roche, Johnson & Johnson and Novartis) tend to perform better in general than companies dependent on pharma R&D.

11th August 2011

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