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BTG to acquire California-based PneumRx for US$ 475 miillion

London, UKThursday, December 4, 2014, 17:00 Hrs  [IST]

BTG Plc, the specialist healthcare company, has entered into an agreement to acquire PneumRx Inc (PneumRx), a growing interventional pulmonology business, on a debt free cash free basis for an initial cash consideration of US$ 230 million (approximately £1471 million) and up to US$ 245 million (approximately £1561 million) in performance-related future milestone payments (the Acquisition).

The Acquisition will be funded in part by a cashbox placing with gross proceeds of approximately £150 million, representing approximately 5 per cent of the company’s market capitalisation based on 03 December 2014 closing share price, announced separately.

PneumRx is headquartered in Mountain View, California. It owns, manufactures and distributes the RePneu Coil System (RePneu), a minimally invasive treatment for advanced emphysema, which seeks to enhance patients’ quality of life by improving lung function and exercise capacity. RePneu is sold in 11 European countries including Germany, Switzerland, Italy and Spain and has a fully recruited US pivotal clinical trial currently underway. US approval is anticipated during 2016.

The rationale for the acquisition of PneumRx is that it: complements BTG’s Interventional Medicine platform expanding it into the emerging area of interventional pulmonology, a developing medical discipline;  adds RePneu, a minimally invasive product backed by clinical evidence, which provides access to a specialty physician base and a market with high unmet need and significant growth potential;  adds a fast-growing business that enhances BTG’s European commercial platform and provides a significant US opportunity;  has an attractive financial impact: annual sales potential over US$ 250 million, estimated ROI  greater than 20% post US reimbursement and expected to be accretive to earnings from Year 4 onwards.

Louise Makin, CEO of BTG, said: “PneumRx brings a differentiated, clinically proven product that can make a real difference to the lives of people with advanced emphysema, for which there are limited current treatment options. It also gives us access to a third potentially high-growth area of interventional medicine, interventional pulmonology. With an annual sales potential of over $250 million, PneumRx is a significant addition to BTG that enhances our portfolio and leadership in Interventional Medicine.”

"All of us at PneumRx are most pleased to join the BTG family and we look forward to joining forces to advance the standard of care in emphysema treatment," said Erin McGurk, Founder, president and CEO of PneumRx.  "Not only does BTG recognize the valuable business opportunity in PneumRx but they also value the PneumRx culture and our employees who have worked tirelessly for the past 10 years to bring us to where we are today.  Our business will continue to operate intact, but we will benefit immediately from the support of an experienced and successful BTG framework.  The future is bright for PneumRx moving forward as a BTG company, as we work together with dedicated physicians around the world who are using the Coils to bring hope to the millions of emphysema patients who have had so few treatment options to date."  

 
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