U.K.-owned Smith & Nephew said today it will acquire Texas-based Healthpoint Biotherapeutics for $782 million cash, in a deal that expands the buyer’s presence in the U.S., as well as its advanced wound division, by adding to its array of medical technologies bioactive wound care technologies such as debridement, dermal repair, and regeneration treatments.
Those treatments, estimated to generate about $190 million in revenue this year—up from $151 million in 2011—are expected to grow at a mid-teens double-digit rate, driven by sales of Santyl® (collagenase) ointment, Smith & Nephew said. Santyl helps dissolve dead tissue in wounds that include chronic dermal ulcers such as pressure, diabetic, and venous stasis ulcers.
The advanced wound division’s sales will double as a result of the deal, the companies said, though opportunities exist over time for consolidation through synergies. Smith & Nephew expects to achieve cost savings of around $20 million by 2015, but that will be negated by incur integration cash costs over the period of around $25 million.
“We are very proud of our employees and the business we have built and believe now is the right time to allow it to grow to the next level by joining a global organization like Smith & Nephew,” Paul Dorman, Healthpoint’s founder, chairman and co-owner, said in a statement.
Smith & Nephew also said it stood to benefit because the Healthpoint acquisition would bring it an established R&D capability in next-generation bioactive therapies. That includes a pipeline whose lead product (HP802-247) is entering Phase III clinical trials for treating venous leg ulcers—an indication Smith & Nephew said represented “a large potential opportunity.”
The company anticipates commercializing HP802-247 over the next five years: “We expect this investment will drive annual R&D spend in the medium term to around $40–50 million per annum.”
The deal is expected to close by year’s end, or else Smith & Nephew must pay another $10 million for Healthpoint, which will continue to be based in Fort Worth, TX.