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Minnesota firm buys Louisville biotech

By Roger Fillion, Rocky Mountain News (Contact)

Published November 4, 2008 at 9:05 p.m.

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Replidyne Inc. Senior Vice President Nebojsa Janjic is pictured in the lab.

Photo by The Rocky / 2005

Replidyne Inc. Senior Vice President Nebojsa Janjic is pictured in the lab.

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Struggling biotech company Replidyne Inc. agreed to sell itself to a Minnesota medical-device company in an all-stock merger valued at up to $40 million.

Under the deal, shareholders of privately held Cardiovascular Systems Inc. will own 83 percent of the combined company. Replidyne shareholders will own 17 percent.

The new company will be based in St. Paul, Minn.

News of the deal drove Replidyne's stock down more than 11 percent to an all-time closing low of 99 cents.

Louisville-based Replidyne has been on the auction block for months. It announced in August that it would slash its work force by 80 percent, to five employees, while it further explored "strategic alternatives" - including a merger or an acquisition.

Before the merger, Replidyne had been encountering roadblocks to win federal approval for a key antibiotic.

The company announced in April that it was halting trials of the drug, faropenem.

The merger is expected to close in the first quarter of 2009. Replidyne's name will be changed to Cardiovascular Systems Inc., and the combined company will apply for listing on the Nasdaq.