OraSure sells cryosurgical systems business for $12M
A $12 million deal announced Monday involves two Bethlehem companies separated by less than 100 feet, just one interesting facet in the transaction that includes a wellestablished portable cryosurgical system commonly used to treat warts.
That system, the Histofreezer product line, is among the several cryosurgical products that OraSure Technologies Inc. sold to CryoConcepts LP, a company founded by Sam Niedbala, who was one of the founders of OraSure’s predecessor, SolarCare Technologies.
Also on the management team at CryoConcepts: Chief Marketing Officer Bill Hinchey, also a SolarCare founder, who was responsible for the U.S. launch of Histofreezer in 1991, and Chief Operating Officer P. Michael Formica, who was the general manager of the Histofreezer business during his tenure at OraSure, which wrapped up in 2016.
“It really is nostalgic,” said Niedbala, CEO of CryoConcepts, located in the Southside Bethlehem Keystone Innovation Zone.
Aside from the familiarity, the deal also is one that makes sense for both companies. CryoConcepts, a roughly 10-year-old company with 18 employees, views the addition of the Histofreezer brand as something that will help accelerate its introduction of cryosurgical products to professional and consumer markets across the globe. For OraSure, which has about 400 employees, the sale allows the company to exit a nonstrategic product line and focus on its core businesses of diagnostic testing and molecular collection kits.
In the deal, Niedbala said, a few OraSure employees will join CryoConcepts on the sales side. They’ll have a few new products to sell, with CryoConcepts this year receiving U.S. Food and Drug Administration clearance on two cryosurgical devices for the physician’s office market. The devices, CryoTouch and CryoLab, have been cleared to treat up to 23 conditions, the company said.
“Our interest is to rapidly introduce them and grow them in the marketplace,” Niedbala said of the company’s new products. “The addition of the Histofreezer gives us access to distributors both here in the U.S. as well as 44 countries around the world.”
While CryoConcepts views Histofreezer as a tool that will allow the company to rapidly grow, OraSure saw its cryosurgical systems’ revenue decline from $12.2 million in 2017 to $10.7 million last year and decided the business didn’t fit in its portfolio as it targets double-digit sales growth, OraSure President and CEO Stephen Tang said.
While unloading cryosurgical systems boosts the company’s growth rate, Tang noted it also frees cash for potential acquisitions. In January, OraSure acquired two companies for $13.3 million: CoreBiome, which has technology that allows researchers to run high-resolution DNA sequencing on samples of the human microbiome, and Novosanis, a producer and distributor of urine sample collection devices.
“We have a very active merger and acquisition group, and the pipelines for opportunities has never been more robust,” Tang said. “So yes, we’re looking to do more in that area.”
While cryosurgical systems didn’t fit in OraSure’s “innovation-driven growth strategy,” Tang said the company was pleased to reach a deal with a suitable buyer in CryoConcepts.
“We’re even more pleased that they have a local presence in Bethlehem,” he said.
And despite a rumor, the deal was not brokered at a neighborhood yard sale, Tang joked.
Morning Call reporter Jon Harris can be reached at 610-820-6779 or at jon.harris@mcall.com.