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London, UK, 06 May 2016: BTG plc, the specialist healthcare company, today announces that it has entered into an agreement to acquire Galil Medical, a leading provider of cryoablation products for the treatment and palliative care of kidney and other cancers.
Galil Medical is a private company that employs approximately 100 people globally and is headquartered in Arden Hills, Minnesota, US. Galil Medical owns, manufactures and sells a portfolio of cryoablation systems and needles. The systems use compressed argon gas to produce extremely low temperatures; as the gas passes through the needle, the tip of the needle is cooled, forming an ice ball. The ice ball engulfs the tumour and destroys the tissue. A variety of needle types are available to produce a freeze zone that matches the tumour size and shape, so that adjacent tissue is not damaged.
In the US, Galil Medical’s products are indicated for the treatment and palliative care of kidney and other cancers, in addition to a number of other uses, including in urology. Galil Medical is also conducting two clinical studies, both nearing completion, that could lead to US regulatory clearance for use in lung metastases and bone metastases.
Galil Medical sells in the US through distributors and its own specialist sales force, and through distributors outside the US. Global revenues were approximately US$22m in 2015, of which US revenues were approximately US$15m. Global revenues from non-urology sources, principally interventional radiologists treating kidney cancer, have shown a 39% CAGR over the last six years and constituted ~$15m of revenue in 2015.
BTG will acquire Galil Medical for an initial cash consideration of US$84.5m (£58.3m) and up to US$25.5m (£17.6m) in future regulatory and commercial milestone payments in respect of the period to 31 December 2018. The acquisition will be funded from BTG’s existing cash resources. BTG expects Galil Medical to be profitable and the transaction to be earnings accretive in the first full year of ownership.
Louise Makin, BTG’s CEO commented: “This bolt-on acquisition builds on our leadership in Interventional Oncology, expanding our portfolio of minimally invasive therapies with the leading technology in the cryoablation of kidney cancer. It also offers significant pipeline opportunities, including lung and bone metastases if regulatory approvals are granted. In addition to enhancing our offering to interventional radiologists, Galil Medical provides access to other specialist physicians that may in future include pulmonary specialists, complementing our existing PneumRx and EKOS businesses. Longer term, we are excited by the opportunity to explore the use of our locoregional radiation and cryoablation therapies alongside other developing technologies.”
Closure of the transaction is expected before the end of June 2016. In its last published audited accounts for the year ended 31 December 2015, Galil Medical reported gross assets of $14.1m and a loss before tax of $8.5m. Galil Medical’s principal investors are the US based venture capital companies Thomas, McNerney & Partners, The Vertical Group and Investor Growth Capital. Evercore Partners International LLP advised BTG on the transaction.