An acquisition halfway across the United States this past week ended up benefiting a Salt Lake City-based biotech firm.

Minnetonka, Minnesota-based American Medical Systems Holdings (Nasdaq: AMMD) announced last week the acquisition of Northbrook, Illinois-based TherMatrx in a $40 million all-cash, non-refundable transaction plus contingent payments based upon future sales of TherMatrx products.

As a significant shareholder in TherMatrx, BSD Medical (OTC BB: BSDM) announced last week that it expects to receive a payment of roughly $9 million in cash once the transaction closes for its shares of TherMatrx.

As part of the purchase, American Medical also agreed to pay current TherMatrx shareholders additional contingent payments of four-times TherMatrx revenues for each of the six quarterly periods ending December 31, 2005, with contingent payments beginning once accumulated revenues for TherMatrx products exceed $10 million on a go-forward basis.

Based upon current growth trends, Salt Lake City-based BSD anticipates it will receive contingent payments of approximately $30 million from American Medical for BSD's shares of TherMatrx.

As explained in my column of March 1, BSD utilizes very sophisticated microwave generators to deliver beams of energy directly at tumors deep within the body or on the skin to give those tumors the equivalent of a fever of around 105 degrees Fahrenheit.

Such fever-like temperatures are not high enough to cause serious harm to the body or the surrounding non-cancerous tissues, but just (high) enough to cause the body to flood the area with blood in an attempt to cool off the feverish region.

Hence, when used in conjunction with radiation or chemotherapy, BSD's hyperthermia treatments dramatically increase the success of fighting cancer with radiation and/or chemotherapy.

In addition, and what I didn't write about previously, BSD formed TherMatrx along with two other firms in November 1997 to utilize BSD technology to focus on treating benign prostatic hyperplasia (BPH), with (if my calculations are correct) BSD owning today roughly 25 percent of TherMatrx.

BPH is a benign condition that results when the prostate gland enlarges as men age. Approximately 50 percent of men in their 50s (and more than 75 percent of men 80 or older) suffer from symptoms of BPH. At a minimum, BPH negatively impacts quality of life issues and leads to frequent urination, urgency and painful urination. If left untreated, BPH can also result in complete obstruction (acute retention of urine), urinary infections, loss of bladder functions and kidney failure.