Vancouver-based medical device maker Urodynamix Technologies Ltd. (TSX-V: URO) announced Tuesday it has sold the majority of its assets for $2.1 million after falling victim to policy changes in the United States.
The American Medical Association’s changes to the medical-reimbursement policy last January removed a key incentive for doctors in the U.S. to select the company’s bladder-monitoring device over other technologies.
Having lost most access to the its primary market in the U.S., Urodynamix’s revenue in the first nine months of 2010 fell to $61,700, compared to $308,000 in the same time frame in 2009.
The company has been undergoing a strategic review of its business during 2010.
According to an asset purchase agreement made with HEGLN Pharmaceuticals Inc. on July 2, Urodynamix received a deposit representing 10% of the $2.1 million purchase price in September and an additional 40% of the purchase price on Tuesday’s announced closing.
Urodynamix will receive 30% of the $2.1 million upon transfer of the physical assets and tooling, and the final 20% upon transfer of manufacturing know-how.
The entire sale is expected to close before the year’s end.
To complete the deal, Urodynamix terminated license agreements with the University of British Columbia and the National Research Council of Canada.
"Management and the board of directors are actively pursuing strategic alternatives for the company post transaction to maximize shareholder value," said Barry Allen, Urodynamix’s president and CEO, in a release.
Urodynamix’ share price was $0.01 during mid-morning trading Tuesday. Its share price has remained below $0.03 in 2010.