ARTHROCARE BUYS APPLIED THERAPEUTICS ASSETS

Austin, Texas-based ArthroCare has purchased substantially all of the business and assets and assumed certain liabilities of Applied Therapeutics, a maker of wound care products for ear, nose and throat indications.

Under the agreement, ArthroCare purchased substantially all of the business and assets of Applied Therapeutics for $10 million in cash and a contingent payment based on Applied Therapeutics' net revenue for the period of Feb. 1, 2006, through Jan. 31, 2007, which would be payable in the first quarter of 2007. ArthroCare anticipates the acquisition to be earnings neutral in 2005, excluding one-time closing adjustments. The company expects the product line to add at least $5 million in revenue and be modestly accretive in 2006.

Some of the assets being purchased include Applied Therapeutics' Gel Knit nasal dressings and dissolvable Sinu Knit stents, which are used after endoscopic sinus surgery to control minor bleeding, facilitate epithelial healing and preserve the spatial integrity of the sinus.