Somanetics (SMTS) Signs with Raba Equity for Johns Hopkins Cerebral Autoregulation Tech

October 14, 2009 8:59 AM EDT

Somanetics Corporation (NASDAQ: SMTS) today announced that it has signed an Exclusive Sublicense Agreement with Raba Equity Partners II, LLC., which allows Somanetics to obtain exclusive rights, subject to specified rights of the U.S. Government and rights retained by The Johns Hopkins University, to new cerebral autoregulation technology developed at The Johns Hopkins University.

Somanetics has provided Raba coreFoundry an up-front, non-refundable payment of $1.8 million and will pay a royalty on future revenue associated with the technology. The up-front payment will be accounted for as a research and development expense in the fourth quarter of fiscal 2009.

Somanetics plans to utilize this patent-pending method of combining blood pressure measurements and signals from the INVOS System to continuously monitor and display cerebral autoregulatory function information.

"Adding the ability to noninvasively assess the state of cerebral autoregulation to the INVOS System's existing measurement of brain oxygen saturation should enhance the value proposition for the INVOS System, increase our market potential by supporting entry into new clinical applications and strengthen our leadership position in the growing oximetry market," said Bruce Barrett, Somanetics' president and chief executive officer.

Cerebral autoregulation refers to the body's ability to maintain constant blood flow to the brain despite changes in blood pressure. Somanetics plans to file a new 510(k) pre-market notification with the FDA to support marketing the new module in the U.S. by late 2010 and initiate product shipments for sale early in 2011.

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