TORONTO, Feb. 7 /CNW/ - Spectral Diagnostics Inc. (TSX: SDI) is pleased to announce today the closing of the sale of its rapid cardiac immunoassay test business to Nanogen, Inc. (NASDAQ: NGEN). Dr. Paul Walker MD PhD, CEO of Spectral stated, "Today represents a new chapter for Spectral. Spectral will now have the opportunity to focus on its key growth areas in sepsis and infectious disease. We will have sustainability through our royalty and reagent revenues, and growth both from our existing products and from other potential opportunities facilitated by our strengthened balance sheet." As a result of the transaction, Spectral received total consideration of CDN$9 million. Nanogen acquired Spectral's assets related to the rapid cardiac business, including certain intellectual property and capital equipment, and assumed on-going operating responsibilities for sales, marketing, manufacturing and facilities related to the rapid cardiac business. Spectral retains intellectual property and revenues related to its market leading single chain Troponin I calibrator, as well as other high value reagents. This retained reagent business accounts for approximately CDN$3 million dollars in annual revenues. Approximately 50 employees will join Nanogen, including David Ray, former Chief Operating Officer of Spectral. "Spectral has retained the key personnel, capabilities and equipment to manufacture its remaining products, support the development of new products, manage ongoing clinical development, and continue new business development. Today, we are a leaner company, adequately funded for our planned operations, and focused on rapidly delivering shareholder value. We are very excited for our future," Dr. Walker added. Spectral's major retained product lines include the Endotoxin Activity Assay. This product holds a market leading position as the world's first FDA approved diagnostic test for sepsis. Sepsis kills approximately 750,000 people in the U.S. each year and accounts for over 17 Billion Dollars in annual healthcare costs. Spectral currently has clinical placements of this assay in Japan, the United States, Canada, and Europe. Spectral also has developed important partnerships for commercializing this assay, including with major therapeutics companies. Spectral also retains its West Nile Virus Assay, as the flagship product in Spectral's infectious disease testing portfolio. This assay is the first rapid individualized assay designed to screen patients potentially infected with West Nile Virus and provide results in minutes. The assay received approval from Health Canada in late 2005. Spectral is currently pursuing regulatory approval for the U.S. market for the coming summer season. West Nile Virus is a mosquito-borne pathogen that represents a major emerging public health threat in North America and has been responsible for nearly 1,000 deaths. Spectral is a developer of innovative technologies for comprehensive disease management. Spectral provides accurate and timely information to clinicians enabling the early initiation of appropriate and targeted therapy. Current products include Spectral's FDA approved rapid diagnostic for sepsis (the Endotoxin Activity Assay). New products include Spectral's rapid West Nile Virus (WNV) assay. Spectral manufactures the EAA and WNV assays. Spectral earns royalties associated with its proprietary reagents. Spectral's common shares are listed on The Toronto Stock Exchange: SDI. Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of Spectral and anticipated events or results, are assumptions based on beliefs of Spectral's senior management as well as information currently available to it. While these assumptions were considered reasonable by Spectral at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of Spectral to take advantage of business opportunities in the biomedical industry, the granting of necessary approvals by regulatory authorities as well as general economic, market and business conditions, and could differ materially from what is currently expected. %SEDAR: 00002006E