US firm SurModics has acquired fellow drug delivery specialist Brookwood Pharmaceuticals in a deal worth up to $62m.
SurModics is paying a $40m sum for the Alabama-based outfit, with a further $22m to be paid on achievement of various milestones associated with existing customer projects.
The acquisition, announced yesterday, is the most significant one-time payment in Brookwood parent company Southern Research Institute's 65 year history, and brings a host of additional capabilities and capacity to new owner SurModics.
Brookwood and its wholly owned subsidiary Lakeshore Biomaterials provide proprietary polymer-based technologies to pharmaceutical companies developing improved drug products.
SurModics is particularly enthusiastic about the fact that, through the acquisition, the company gains access to technologies allowing it to offer products with systemic drug release profiles, whereas it has previously focused on site-specific drug delivery.
Through the purchase, SurModics not only gets it hands on additional proprietary platform technologies, but also gains Brookwood's manufacturing facilities, enhancing the company's production capacity and potential services.
Brookwood currently boasts four clean room suites, three suites that can be operated independently for drug and drug delivery products, and an additional three-room suite dedicated to biomaterial production.
The company's facilities cover 650 sq ft. within each suite, with appropriate quality compliance, and Lakeshore adds another 500 sq ft. of clean room space available for biomaterial contract manufacture.
According to SurModics, the additional manufacturing capacity will be of particular use following the research agreement with Merck announced at the end of June this year. The collaboration focuses on the development and commercialization of products applying SurModics' I-vation sustained drug delivery platform for severe retinal diseases.
Brookwood's own manufacturing expertise focuses on microencapsulation (particularly injectable microparticles), injectable solid implants, and the synthesis of biomatierials and injectable drug particles.
The company currently has 30 projects in hand with a number of clients in the pharmaceutical, biotechnology and medical device sectors, covering key indications within oncology, diabetes, ophthalmology, orthopaedics and alcoholism, bringing these markets within SurModics' remit.
SurModics has high hopes in bringing the two companies together, anticipating that the individual technologies from each firm can be united to create new and improved systems, and drive business with existing customers.
Specifically, SurModics hopes to combine its own Eureka biodegradable polymer family with Brookwood's proprietary drug delivery platforms to offer a "compelling novel technology…well suited for systemic drug release products."
Brookwood, originally spun out from Southern Research in 2005, will operate as a distinct business unit according to SurModics' current plans, and the supply of biodegradable polymers through the Lakeshore subsidiary will continue to be an important focus, according to the company.
Brookwood generated just under $13m in revenue over 2006, making a nice contribution to SurModics' coffers, which in 2006 were filled with revenue totalling just under $70m.