British healthcare group BTG is snatching up interventional pulmonology outfit PneumRx in a deal worth up to $475 million, getting its hands on the company's device for severe emphysema and diversifying its product offerings.
BTG will pay $230 million up front and up to $245 million in performance-related milestones for Mountain View, CA-based PneumRx. The company's RePneu Coil implant relieves breathlessness in emphysema patients by holding small airways open to prevent their collapse, and BTG sees the business as having potential annual sales of more than $250 million, Reuters reports. BTG plans to fund its purchase in part by a $235 million share placing.
RePneu Coil is already CE-marked and has been used in Europe to treat emphysema since 2008. PneumRx recently completed enrollment for a new, 315-subject clinical trial of the device and plans to submit one-year data from the study to the FDA in late 2015 for PMA approval, the company said in a statement. BTG hopes to obtain FDA approval for RePneu Coil by the end of 2016, according to the Reuters story.
|PneumRx CEO Erin McGurk|
Both sides stand to benefit from the deal, as PneumRx looks for additional funding to bring its RePneu Coil to market and BTG strives to generate growth. BTG's Chief Executive Louise Makin told Reuters that the acquisition of PneumRx would boost its growth prospects significantly, with its interventional medicine business now expected to generate sales of more than $1.25 billion by the beginning of the next decade. BTG already has products for interventional cancer and vascular medicine, including high-tech beads that fight tumors and a foam that is injected into blood vessels to treat varicose veins.
Meanwhile, business will continue as usual for PneumRx but the company will "benefit immediately" from BTG's market expertise, Erin McGurk, president and CEO of PneumRx, said in a statement.
"The future is bright for PneumRx moving forward as a BTG company, as we work together with dedicated physicians around the world who are using the Coils to bring hope to the millions of emphysema patients who have had so few treatment options to date," she said.
- read the Reuters story
- here's PneumRx's statement