Tokos Acquires Firm That Makes Prenatal Monitor

Tokos Medical Corp. on Tuesday concluded a $31.4-million acquisition of a small Atlanta-based firm that it hopes will be the first to win federal approval to market a uterine monitoring device to detect pre-term labor.

The completion of the merger with Physiologic Diagnostic Service, first announced in June, was delayed pending completion of a Federal Trade Commission review of the deal’s antitrust implications. Tokos, which is based in Santa Ana, said the FTC completed its probe Friday without taking any action.

Tokos officials said the combination gives Tokos a solid foundation for growth because the company now will be able to aggressively market a device for use by women with a history of pre-term labor. In addition, the company hopes to win other Food and Drug Administration approvals for use of the monitoring device.

“It will . . . enable us to expand the approved FDA indications for our home uterine activity monitors and enhance our ability to obtain broader reimbursement coverage of our pre-term labor management services,” Tokos Chairman and Chief Executive Robert F. Byrnes said in a prepared statement.

Wall Street reacted favorably to the news of the merger. Tokos’ stock closed at $11.625, up $1.625 a share in heavy over-the-counter trading. Still it is trading below its March initial offering price of $12, and its 1990 high of $16.50.

“The rebound in the stock price is pretty much replacing the decline (in Tokos’ stock price) that occurred when the FTC began its investigation,” said Dorothy Ryan, senior health services analyst with Robertson Stephens & Co., a San Francisco securities brokerage.