Medafor sells to Bard for $200 million, plus incentives that could add another $80 million.

Officials at Medafor Inc., a Brooklyn Center-based maker of a novel blood clotting product, said they’ve been looking for ways to enhance shareholder value — be it an initial public offering, new business relationships or just continuing organic growth. The one thing they weren’t looking for was a buyer, leaders said Monday.

Then the folks at C.R. Bard Inc., a New Jersey-based medical equipment maker, came calling.

Their offer — $200 million in cash now and up to $80 million more if revenue targets are hit in the next two years — proved too attractive to pass up, said Medafor CEO Gary Shope.

Medafor on Monday announced that it has an agreement to be purchased by C.R. Bard’s Davol Inc. division. The transaction has been approved by both companies’ boards of directors, but is subject to approval by Medafor’s shareholders and customary regulatory review.

“The premium price underscores what we have been building on,” Shope said in an interview Monday. “I think the shareholders are being rewarded with a great price.”

Medafor’s appeal has been its plant-based microporous polysaccharide hemospheres technology, which is used in its Arista MPH hemostat product. The product rapidly dehydrates blood and accelerates the body’s natural blood-­clotting process.

Sept. 24 is the target date for shareholder approval, Shope said. The deal values Medafor’s privately held shares at $6.37 per share. The revenue-based incentives are valued at up to $2.82 per share.

It’s a significantly better deal than the $2 per share that Atlanta-based CryoLife Inc. proposed in a takeover bid in 2010. At the time, the Medafor board called the bid “grossly inadequate.” CryoLife was an exclusive-rights distributor for Medafor’s blood-clotting technology in the United States and some international markets. It had also made offers for Medafor in 2008 and 2009, which Medafor also rebuffed.

C.R. Bard said Medafor will add approximately 1 percent to its 2014 revenue.

The company, a maker of vascular, oncology and surgical products, had revenue of about $3 billion last year. Scott Lowry, C.R. Bard vice president and treasurer, said he expects Medafor, which has 33 employees, to have annual revenue of $30 million to $40 million by the end of 2013. Medafor’s products will complement C.R. Bard’s hemostasis unit and broaden its product portfolio, he said.

“We look at this as a growth opportunity,” Lowry said. “Our plan is to grow this business.”

He says it is premature to comment on status of Medafor’s management and employees since the deal still needs Medafor shareholder approval and to pass other regulatory requirements. Shope, the Medafor CEO, said he believes that Bard is considering keeping the Medafor organization intact but that “going forward, they will be making their own decisions.”

John Houston, an attorney at Fredrikson & Byron who served as Medafor’s lead legal counsel for the transaction, said: “This really was an offer that came out of left field. It was not solicited and it was not anticipated.”

Officials from Bard had met with two of Medafor’s senior officers at a conference in Spain less than a year ago, he said.

According to C.R. Bard’s statement on the acquisition, the global market for surgical hemostats is over $1.4 billion. “The Arista hemostat provides a great alternative to other commercially available hemostats while providing strong synergy with our Progel Sealant technology and sales channel,” said Timothy Ring, C.R. Bard’s chairman and CEO.

Military, civilian medical experts emphasize investment in acute trauma care

FORT LAUDERDALE, Fla. (Aug. 13, 2013) -- From battlefield blasts to plane crashes, major advancements in acute trauma care are being seen in both the military and civilian health sectors, agreed experts during roundtable discussion at the 2013 Military Health System Research Symposium, Aug. 13, in Fort Lauderdale, Fla. 

Funding in research and rapid implementation of best practices are paying off, and people with serious injuries are surviving and rehabilitating, said director of the U.S. Army's Combat Casualty Care Research, or CCCRP, Program Col. Dallas Hack. Joining him was Air Force Col. Todd Rasmussen, CCCRP deputy director.

"It's not an overstatement to say that trauma care has been transformed because of this investment," said Rasmussen. "This transformation has resulted in the lowest fatally rate for service members we have ever seen, and this investment has translated to civilians, including those injured on the streets of this country."

Roundtable participants included Navy Capt. Eric Elster, Uniformed Services University School of Medicine, Department of Surgery professor; Air Force Col. Jeffrey Bailey, Joint Trauma System director; and Dr. Margaret Knudson, chief of surgery at the San Francisco General Hospital and Trauma Center.

Bailey, who joined the event via phone from Afghanistan, talked about some of the technologies, tools, and education implemented over the past decade of war, including battlefield tourniquets, hemostat bandages to reduce blood loss, and education on first-aid care. Bailey said now it's time to "focus on the gaps."

"The greatest burden of death is not in the hospital; it is on the battlefield. So we have the greatest opportunity to make a difference in pre-hospital care," Bailey said to the group.

It was a point with which non-military doctors agreed. Knudson joined the group to share her recent experiences caring for victims during the San Francisco plane crash in July. Fifty-three of the plane crash patients were treated at San Francisco General.

Knudson explained that she had previously trained with military health care combat casualty teams and how she used that training during the mass casualty triage. 

"We need to keep these collaborations going because it brings a value to both the military and the civilian sectors," said Knudson.

Elster added, "It's how we train the next generation."

Arch Therapeutics Announces Plans for Upcoming Activities

CAMBRIDGE, MA, Aug 06, 2013 (Marketwired via COMTEX) -- Arch Therapeutics, Inc. (otcqb:ARTH) ("Arch" or the "Company"), a life science company and developer of AC5(TM), a novel product aimed at controlling bleeding and fluid loss in order to provide faster and safer surgical and interventional care, is pleased to provide a brief review of proposed future activities.

Arch Therapeutics CEO Dr. Terrence Norchi states, "We are thrilled to be moving ahead with the development of our core technology. We envision the potential future customers in the marketplace for AC5(TM) and related products will include surgeons and other doctors, government agencies, hospital and operating room management, ambulances and trauma specialists. These market segments, even taken separately, present meaningful opportunities for the Company."

According to a 2012 report produced by MedMarket Diligence, LLC, approximately 114 million surgical and procedure-based wounds occur annually worldwide, including 36 million from surgery in the U.S. We estimate that 20-25% of those surgeries are performed laparoscopically. Additionally, there are many minor procedures and operations that may not be included in those figures. Those surgeries and other procedures could benefit from sealants and hemostatic agents, as surgical and trauma patients are at significant risk for morbidity and mortality from bleeding and/or leaking body fluid.

As a result of this demand, use of hemostatic agents and sealants is increasing. According to MedMarket Diligence, the market for these products achieved approximately $3.4 billion in 2010 worldwide sales and is projected to reach $4.5 billion in 2013 and surpass $6.5 billion in 2017. Over two-thirds of those sales are for hemostats. The growth rate for sealants is even higher than that for hemostats due to a general lack of available products and potentially larger unmet need.

The results of early data from preclinical tests have shown that AC5(TM) achieves hemostasis quickly and effectively. From a commercialization perspective, improvements in relevant synthetic manufacturing techniques in the past several years have reduced complexity and decreased materials cost. Further, AC5 will be made of naturally occurring ingredients that are not sourced from humans or other animals, but do exist in humans in their natural state. This type of ingredient is categorized as "generally recognized as safe," or "GRAS," by the U.S. Food and Drug Administration ("FDA"). Although the FDA and other regulatory authorities or related bodies will finally determine the classification of AC5(TM), the Company believes it meets the criteria for a medical device.

In furtherance of its stated long-term business goals, the Company reiterated plans to focus on the following activities during the remainder of calendar year 2013 and calendar year 2014:

-- further developing and securing intellectual property rights; and 

-- engaging a large scale manufacturing partner to produce cGMP product for clinical trials;

-- participating in EU and, subsequently, U.S. regulatory meetings; 

-- preparing for initial clinical trials, including developing clinical trial protocols; 

-- conducting formal biocompatibility studies;

-- commencing human clinical trials.


Company CEO Dr. Terrence Norchi further comments, "We believe that AC5(TM) will meet increasing demands, with anticipated market entry for use in laparoscopic, as well as open surgery. While open surgery represents the more established market for hemostatic agents, approximately one-quarter of surgeries are laparoscopic, and that number is growing. Many of the hemostasis products currently available do not possess certain features and handling characteristics that are ideal for the laparoscopic setting. Further, there seems to be increased pressure to perform more complex surgeries at reduced costs, including conducting operations in less expensive outpatient settings. We believe that the novel features and differentiating characteristics of our technology platform, starting with AC5(TM), will address the need for highly improved hemostatic and sealant products."

Additional details regarding Arch Therapeutics, Inc., its business, agreements and related matters are filed as part of the Company's continuous public disclosure as a reporting issuer under the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission ("SEC"), and are available at the SEC's website at www.sec.gov. For more information, visit our website at www.archtherapeutics.com.



About Arch Therapeutics, Inc. (otcqb:ARTH) Arch Therapeutics, Inc. (otcqb:ARTH) is a medical device company developing a novel approach to stop bleeding (hemostasis) and control leaking (sealant) during surgery and trauma care. Arch's goal is to develop and commercialize products based on our innovative technology platform that make surgery and interventional care faster and safer for patients. Arch's flagship development stage product candidate known as AC5(TM) is being designed to elegantly achieve hemostasis in minimally invasive and open surgical procedures. Find out more at www.archtherapeutics.com.

Medicines Co. wraps $240M deal to buy ProFibrix following PhIII success

The Medicines Company has swooped in to buy out the Dutch biotech ProFibrix, chipping in $90 million in cash on top of a $10 million option anted up in June as Phase III data on a lead surgical therapy loomed. And the buyer has agreed to pay up to $140 million more for a set of unspecified milestones.

The Medicines Company ($MDCO) is landing Fibrocaps in the deal, an easy-to-use dry-powder formulation of fibrinogen and thrombin that can be used to stop bleeding during surgery, a process referred to as hemostasis. In their release today the companies noted that the lead biologic hit all primary and secondary endpoints on four surgical indications: spinal surgery, hepatic resection, soft tissue dissection and vascular surgery. Investigators recruited 719 patients for the Phase III study.

The plan now is to file for EU approval in the fourth quarter of this year, with an FDA application following in the first quarter of 2014, commented ProFibrix CEO Jan Ohrstrom. And The Medicines Company believes it can earn more than $300 million a year on the product, provided it wins key approvals.

"The company was founded in 2007 with an A round from Index Ventures," adds Ohrstrom. Phase I was run in 2008 and investigators are now wrapping a 5-year clinical program, with more work scheduled on laparoscopic surgery as well as a pediatric program. The CEO says more indications are also being "toyed with," but he declined to elaborate. The company's lab in Leiden will stay operational, says Ohrstrom, the former chief medical officer of ZymoGenetics. ProFibrix currently has 25 employees in Leiden and Seattle, where it has a clinical development site.

"Subject to regulatory approval, we believe Fibrocaps can become an important hemostatic product--complementary to Recothrom (Thrombin, topical [Recombinant])," says Clive Meanwell, the CEO at The Medicines Co. "We anticipate leverage of our work with U.S. surgery centers and entry into the European market. … ProFibrix also has a proprietary recombinant fibrinogen development program which potentially allows us to create the world's first recombinant thrombin and recombinant fibrinogen combination products. We plan to integrate the ProFibrix team with our existing Recothrom team--expanding our activities in surgery in pursuit of our purpose which is to save lives, alleviate suffering and improve the economic efficiency of leading hospitals worldwide."

The market for hemostatic products has been busy with new developments for years. Just a few weeks ago Omrix Biopharmaceuticals won a recommendation from the CHMP in Europe for the sealant matrix Evarrest, which also combines fibrinogen and thrombin. But The Medicines Company is hoping that ProFibrix's off-the-shelf technology will quickly win converts.