Covidien Plc, one of the world's largest healthcare devices and disposables makers, yesterday struck a deal to buy Israeli respiratory systems maker superDimension Ltd for about $300 million in order to expand its offerings into the diagnostics and treatment of lung diseases.

Under the deal that is expected to close in the second quarter of 2012, Covidien will pay privately-held superDimension about $300 million, and a potential future earn out payments.

With annual sales of approximately $30 million, superDimension's i-Logic System uses Electromagnetic Navigation Bronchoscopy to provide minimally invasive access to lesions deep in the lungs as well as mediastinal lymph nodes. By extending the reach of conventional bronchoscopes, the i-Logic System facilitates more effective evaluation of lung lesions, potentially enabling safer, more effective tissue biopsies.

superDimension uses the electromagnetic Navigation technology that was originally developed for planes to navigate within the body by developing an endoscope for the bronchial tubes.

Its electromagnetic navigation bronchoscopy includes a sensor fitted at the tip of a catheter, which sends signals to three magnets placed on the patient's chest, and a magnetic sheet on which the patient lies.

This creates a kind of GPS system for positioning the sensor within the lung. The device can then be precisely sent to the suspected area, such as a tumour for taking a biopsy, and mark the spot for subsequent accurate radiation in order to reduce damage to surrounding healthy tissue.

The Herzliya, Israel-based company, which holds 14 US patents, uses the device mainly to diagnose lung cancer.

Founded in 1995 in Tel Aviv by Pinhas Gilboa, superDimension has raised $160 million from OrbiMed Advisors, Pitango Venture Capital, Medica Venture Partner, Gemini Israel Funds, Concord Ventures, Evergreen Venture Partners, Niztanim, and Oxford Bioscience, as well as from strategic investors Covidien Ventures, Boston Scientific, and Pfizer.

OrbiMed, which has invested $27 million, is superDimension's largest shareholder holding a 26 per cent stake. The sale will see OrbiMed get a 167 per cent return on its investment.

Covidien, which is based in Dublin but run from Mansfield, Massachusetts, said that the acquisition will immediately strengthen its worldwide commercial infrastructure, expanding the benefits of the i·Logic System and Electromagnetic Navigation Bronchoscopy to a wider patient population.
 
''Covidien's strategy is to invest in clinically and economically relevant products and technologies which can meaningfully improve patient outcomes while reducing the overall cost of care,'' said Bryan Hanson, president, Surgical Solutions at Covidien.

Post closing, superDimension will become a part of Covidien's Endomechanical product line within the medical devices segment.

Covidien, the $11.6-billion healthcare products company, manufactures, distributes and services a diverse range of industry-leading product lines in three segments - medical devices, pharmaceuticals and medical supplies.

Formerly Tyco Healthcare, Covidien is one of the world's largest producers of bulk acetaminophen, the largest supplier of opioid pain medications in the US, and is among the top 10 generic pharmaceuticals manufacturers in the US, based on prescriptions.