Southern Research Institute sold its wholly-owned drug delivery company, Brookwood Pharmaceuticals, to SurModics in a deal worth up to $62 million. This includes $40 million in cash at closing and up to $22 million in cash upon the successful achievement of specified milestones.
“The moneys to Southern Research generated from this transaction—the most significant one-time payment in its 65-year history—will allow Southern Research to fund other bold initiatives to further its phenomenal history of innovation," says Arthur J. Tipton, Ph.D., Brookwood president and CEO.
Southern Research created Brookwood in 2005. Later that year, Brookwood acquired the Ohio-based external polymer manufacturing business of Alkermes and began operating it as a Brookwood subsidiary called Lakeshore Biomaterials. In the second quarter of 2007, Brookwood helped create a new firm, Aeon Biosciences, also based in Birmingham and included in this deal, which is working to develop a new cardiac stent.
Brookwood Pharmaceuticals will operate as a separate business unit of SurModics. Tipton will lead the team as vp of SurModics and president of Brookwood Pharmaceuticals. The company will remain in Birmingham. An important piece of Brookwood’s business has been to supply biodegradable polymers through its subsidiary, Lakeshore Biomaterials, which will remain an important business focus in Birmingham.
Brookwood generates revenue from R&D fees, polymer sales, and royalty-generating licenses. The company generated $12.7 million in revenue in calendar year 2006, more than tripling the 2004 revenue earned while it operated as an in-house department, according to Southern Research. Since its spinout, Brookwood has achieved strong year-over-year growth and is profitable and cash-flow positive, adds Southern Research.