Galmed Pharmaceuticals acquired Colospan in a $4.5 million deal as the Israel-based biotech looks to create a gastrointestinal platform targeting a dx sector valued at $6 billion.
The deal calls for Colospan shareholders and SAFE (Simple Agreement for Future Equity) holders to get $2.5 million in cash and $2 million in common ordinary shares at the close, which is expected to be completed by the end of the second quarter this year, the company said in a June 8 press release.
The sale has been approved by the boards of both companies and is subject to customary closing conditions.
Galmed picks up Colospan’s device technology and active U.S. pivotal clinical program with the acquisition, including the device maker’s flagship product, the CG-100 intraluminal bypass device. It is designed to protect the anastomosis and reduce the need for a diverting stoma. This is a temporary abdominal opening that redirects waste to an external bag during the healing process.
“While clinically standard, living with a stoma significantly impairs quality of life and creates substantial clinical and economic burden for healthcare systems,” Boaz Assaf, Colospan’s founder and chief executive, said in a statement. “Colospan was founded specifically to answer the clinical and economic burden associated with this problem, creating a stoma-free future for patients.”
The device earned the CE mark under the European Union Medical Device Regulation and is currently under investigational use in the U.S.
“The expected acquisition of Colospan is a defining moment for Galmed and we believe is the type of asset that moves the needle," Allen Baharaff, Galmed’s co-founder and CEO, said in a statement. “We are bringing more than 25 years of clinical execution capabilities together with our public company experience and resources to accelerate the CG-100 pivotal study to obtain FDA regulatory approval.”
Roth Capital Partners acted as financial advisor to Galmed, with Meitar Law Offices serving as their legal counsel in the transaction. Colospan was represented by the law firm Matry Meiri Wacht.