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Cardinal Health to Acquire Lymphoseek Rights for $80 Million

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Cardinal Health Inc. (CAH - Free Report) announced a definitive asset purchase agreement with Navidea Biopharmaceuticals . Per the deal, Cardinal Health will purchase Navidea's Lymphoseek product for lymphatic mapping, lymph node biopsy and the diagnosis of metastatic spread to lymph nodes for the staging of cancer in North America. The proposed deal has been approved by the boards of directors of each company. The transaction is expected to close in the first quarter of 2017.

Navidea will receive $80 million at the closing of the deal. However, the company will also be granted the opportunity to earn up to $230 million of contingent consideration based on certain milestones through 2026. Of the amount, $20.1 million is guaranteed over the next three years.

As part of the transaction, Cardinal Health will license a portion of the acquired intellectual property back to Navidea to allow the latter to develop and sell new immunodiagnostic and immunotherapeutic products for specific purposes in North America, and to continue to produce and sell Lymphoseek, mostly under a different brand, outside North America.

Headquartered in Dublin, OH, Cardinal Health Inc. is a nation-wide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers.

Cardinal Health expects near-term pharmaceutical performance to be subdued owing to lower generic pharmaceutical pricing and, to a lesser extent, from reduced levels of branded inflation.

Zacks Rank & Key Picks

Currently, Cardinal Health carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader medical sector are Medidata Solutions Inc. (MDSO - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) . Notably, Medidata Solutions carry a Zacks Rank #2 while IDEXX Laboratories sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Medidata Solutions has a strong one-year return of roughly 19.24%. The stock represents a long-term expected growth rate of 22.33%.

IDEXX Laboratories represents a solid one-year return of almost 71.07%. The company has a long-term expected growth rate of almost 14.96%.

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