The intellectual property rights acquired in the transaction include all patents and intellectual property associated with the Ovion business acquired by American Medical Systems Holdings (AMS) in 2005. In addition, AMS has released Conceptus from any future royalty obligations under the 2003 settlement agreement between Ovion and Conceptus.

Under the 2003 settlement agreement, Conceptus had been making royalty payments to AMS equal to 3.25% of the company's Essure sales. Following this acquisition, the company will no longer owe these royalty payments.

Commencing with the fourth quarter of 2009, Conceptus will amortize the cost of the intangible assets acquired over the remaining life of the patents, which is approximately eight years. The amortization of intangible assets is expected to be less than the previous royalty payments, making this transaction accretive for Conceptus.

Mark Sieczkarek, president and CEO of Conceptus, said: "This is a well-timed acquisition that further solidifies our ownership of intellectual property around the Essure procedure and increases our freedom to develop the next generation Essure product. The transaction also has a strong financial rationale, as we expect it will lead to immediate increases in gross profit margin and earnings per share."

A service of YellowBrix, Inc.