Axonics acquires Contura and its incontinence hydrogel injection for $200M

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The deal also includes potential milestone payments to the London-based Contura of $35 million, should Bulkamid top $50 million in rolling 12-month sales before the end of 2024. (Getty Images)

Neurostimulation developer Axonics Modulation Technologies has acquired Contura, makers of a hydrogel-based injection to help treat stress urinary incontinence, for a combination of cash and stock totaling $200 million.

The deal expands Axonics’ reach into the indication, alongside its current portfolio of implantable neuromodulation devices for urinary and bowel dysfunction—including the third generation of its stimulator which received an FDA approval earlier this month

Contura’s minimally invasive Bulkamid injection—available for adult women in the U.S. and Europe through an outpatient or office procedure—is used as a bulking agent to add volume to the walls of the urethra, to help restore the natural closing pressure of weakened pelvic floor muscles. Axonics estimates that stress urinary incontinence affects 20 million women in the U.S. alone.

“This acquisition is highly synergistic, leverages our expansive commercial footprint and gives us the opportunity to expand our [sacral neuromodulation] business around the world,” Axonics CEO Raymond Cohen said

“Axonics will provide urogynecologists and urologists with a complete suite of clinically differentiated incontinence solutions for their patients, thereby enhancing Axonics’ value proposition to new and existing customers,” added Cohen, who expects the acquisition to immediately add to the company’s bottom line.

The deal also includes potential milestone payments to the London-based Contura of $35 million, should Bulkamid top $50 million in rolling 12-month sales before the end of 2024. The upfront portion was funded in part with a new $75 million term loan from Silicon Valley Bank.

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While the injection brought in $12 million in 2019 international revenue, it’s so far delivered $2 million in U.S. sales following its initial and limited commercial launch last summer—though Axonics hopes to give that a boost by pulling the product up through its sales organization of more than 220 employees, compared to Contura’s U.S. team of five.

Axonics also entered into a hydrogel manufacturing agreement for Bulkamid, with the rights to a technology transfer after June 2022 that would allow the company to insource its production.

Meanwhile, Axonics has seen quick growth in its own net revenue, to $111.5 million over its 2020 fiscal year compared to $13.8 million the year before. However, its operating expenses topped $120 million, versus $87.9 million in fiscal year 2019.

“In the first year of Axonics’ commercial launch in the United States, we exceeded our ambitious goals despite the pandemic and only having approximately ten months of selling time,” Cohen said. “We look forward to more Americans getting vaccinated and a return to a more normalized elective procedure environment in which we can take full advantage of the strong growth outlook for Axonics and the [sacral neuromodulation] market.”