Merck sets up $240M Alydia Health buyout to beef up its future Organon women's health spinout

Shortly after unveiling plans to spin its multibillion-dollar women’s health portfolio into the new company Organon, Merck & Co. has already lined up what will be its first acquisition: Alydia Health, which makes a device designed to prevent a mother's death during childbirth.

One of this year’s Fierce Medtech Fierce 15, Alydia is slated to receive a series of payments as the buyout—and the spinout—fall into place. First, a $50 million upfront deposit from Merck, followed by $165 million from Organon once it strikes out on its own, as is expected before the end of June. An additional $25 million in potential milestones brings the total to $240 million.

The company’s Jada device is designed to treat postpartum hemorrhage, the excessive bleeding that can follow childbirth, by applying a light vacuum pressure to draw the walls of the uterus together and hold them until the bleeding stops. It delivers the same mechanism of action as a uterine tamponade, but in the opposite manner, using suction instead of inflating a balloon to deliver compression and promote healing. 

RELATED: Fierce Medtech's 2020 Fierce 15 | Alydia Health

Alydia Health Jada
The Jada System (Alydia Health)

“Our goal is to help make childbirth safer for more women,” Alydia CEO Rob Binney said. “With critical gaps in maternal care, we believe this acquisition will potentially accelerate the delivery of the Jada System to more women and communities in need.”

The device will find a new home among Organon’s portfolio of contraceptive implants and removable birth control, including Nexplanon and NuvaRing, as well as a line of biosimilar drugs developed with Samsung Bioepis. 

RELATED: Merck pulls back the curtain on Organon with declining women's health portfolio but determined women in C-suite, board

Organon’s products posted 2020 revenues of $6.5 billion, but this represents a steady drop from 2019’s $7.8 billion and 2018’s $8.3 billion—sales that are expected to be tamped down further by generic competition. 

To drive growth, the company plans to “actively engage in business development and collaboration activities” focused on women’s health, it said in a securities filing, with Alydia being a prime example.

“The acquisition aligns with Organon’s strategy to become a global leader in women’s health by focusing our product development on her unmet medical needs,” said longtime Merck vet Kevin Ali, who will serve as CEO of the publicly traded spinout—which the Big Pharma claims will have more women on its board than any S&P 500 healthcare company.

“We believe that Organon’s strong global commercial footprint in reproductive health, in conjunction with Alydia’s rapidly growing commercial capabilities in the U.S., will help enable growth of the Jada System, including potential expansion into Europe and other developed countries, as well as in the world’s least developed markets where Organon has significant experience creating affordable access,” Ali said.