Eden Prairie's Surmodics buys Irish medical device company for $40M

Eden Prairie-based Surmodics has acquired a maker of venous clot removal medical devices to give it two FDA-cleared devices to treat blocked veins and arteries.

Surmodics is spending $39.9 million upfront for Ireland-based Vetex Medical Ltd.; the total amount could increase by another $7 million depending on regulatory and new product milestones.

"This acquisition demonstrates our commitment to the expansion of our thrombectomy platform to remove thrombus in venous vascular beds, with an exciting technology that offers significant improvements over current therapies," said Gary Maharaj, chief executive of Surmodics in a news release. "Surmodics is now well positioned with two ground-breaking, FDA-cleared mechanical thrombectomy devices to treat both arterial and venous thrombosis."

Vetex was founded in 2016 and has five employees in Galway, Ireland, that are expected to join Surmodics' existing research and development team in nearby Ballinasloe, Ireland.

Venous thromboembolism, VTE, are blockages in veins usually found deep in the lower leg, thigh, or pelvis. The ReVene Thrombectomy Catheter from Vetex typically targets large blockages in the legs with a catheter that can break up and collect the clots in single session.

Vetex's device got U.S. Food and Drug Administration (FDA) approval in December 2020 and Surmodics expects to start producing revenue in the second half of calendar 2022.

Surmodics' Pounce Thrombus Retrieval System was cleared for received FDA 510(k) clearance in September 2020 and its primary use has been to treat arterial blockages.

"The synergies between the Vetex technology and their talented team, with our capabilities on our Pounce thrombectomy technology enables us to accelerate our thrombectomy platform development for the future treatment of pulmonary embolism (PE)," Maharaj said.

Surmodics is best known for its coatings technology used on intravascular medical devices but it also produces supplies for in vitro diagnostic immunoassay tests and microarrays.

Needham analysts Mike Matson and David Saxon wrote favorably of the deal that expands Surmodics' offerings beyond surface modification coating.

In a note to investors this morning, they reiterated their "buy" recommendation and wrote that the acquisition "supports our thesis that Surmodics can continue to build out its whole product solutions offering to increase its market opportunity and revenue growth rate."

For their most recently completed fiscal year ended Sept. 30, 2020, Surmodics had revenue of $95 million, down 5.2% from the previous year.

But for its second quarter ended March 31, Surmodics had revenue of $35 million, up 53% from the same quarter a year ago and said it expects its annual revenue to be $101 million to $105 million.

The deal was completed on Friday and announced on Tuesday. Shares of Surmodics closed on Tuesday at $53.60, down 72 cents.