Caprius seeks to reinvent itself again as center firm
Big ambitions are shrinking fast at Caprius. The Wilmington, MA, company, which once aspired to be a major vendor of high-field and dedicated MRI products, could soon leave the equipment manufacturing business altogether.
On Dec. 3, Caprius announced plans to sell the assets of its dedicated MR mammography system, Aurora, to venture capital firms Mi3 and Ampersand. Caprius chairman and CEO Jack Nelson declined comment to SCAN until the firms reach a definitive sales agreement later this month.
Caprius assessed the value of the deal at an estimated $5 million in payments and future royalties. Mi3 director of finance and administration Jean O'Connor noted that the sale, if finalized, would likely involve payouts extending over time.
Mi3 (Medical Imaging Innovation and Investment) and Ampersand, both based in Wellesley, MA, would likely form a separate company to market and develop Aurora. Company leadership would not involve either O'Connor or William McPhee, president of Mi3. O'Connor would not divulge who is being considered to run the fledgling company, if it is established. The goal behind its formation, however, is clear.
"The best thing would be to get the product out there and help breast imaging the best we can," O'Connor said. "We want to grow the company."
Mi3 and Ampersand have an exclusive negotiating period through Jan. 13 to buy the Aurora manufacturing operations. Key elements in the still-evolving deal call for Mi3 and Ampersand to assume all ongoing liabilities and debts connected to Aurora, according to a statement issued by Caprius. Any transaction would be subject to conditions including approval by the Caprius board, the completion of definitive agreements, and due diligence by the acquirers.
Caprius would benefit, not only from the infusion of cash, but also from cost reductions that would come from transferring Aurora technology. Financial statements from Caprius indicate that the Aurora program has been a drain on the company. For the nine months ended June 30, its total revenues decreased 77% to $2.7 million. During this period, losses increased 14% to $13.2 million. Those losses reflect in part a $7.1 million charge for purchased R&D.
