Advanced Medical Solutions Group plc: Acquisition of Sealantis

Winsford, UK, 31 January 2019: Advanced Medical Solutions Group plc (AIM: AMS), the surgical and advanced wound care specialist company, today announces it has acquired Sealantis Limited (“Sealantis”), a developer of an alginate-based tissue adhesive technology platform, for $US 25m (approximately £19m) in cash with royalties due until December 2027 on sales of any of its products that are currently in development.

Overview of Sealantis
Sealantis is an Israeli-based medical device company with a patent-protected alga-mimetic sealants technology platform with a wide range of potential surgical indications under development. Its two most advanced surgical sealant products are Seal-G, an open surgery device already CE marked for reinforcement of the staple / suture line to minimise anastomotic leaks following gastrointestinal surgery, and Seal-G MIST (Minimally Invasive Spray Technology) the equivalent laparoscopic device for the same indication but performed through keyhole surgery.

For the year ended 31 December 2017, Sealantis reported gross assets of approximately £0.5m
(ILS 2.1m) and a net loss of approximately £1.5m (ILS 6.6m).   

Acquisition benefits
As well as a world class extension of our longer-term product development capability, strategically, the acquisition provides AMS with a technology platform and delivery systems that have significant potential across a range of applications in the high-margin internal surgery market which includes the $1 billion internal sealant market. These include the existing CE marked product to reinforce and protect gastrointestinal anastomoses, of which there are more than 6 million procedures performed annually worldwide1, with additional significant potential in Neuro, Orthopaedic, and Cardiovascular surgery indications.

Being alginate based, the technology and products have significant competitive advantages over existing market leading products in this space. Importantly, the products do not need refrigerated transport or storage, can be delivered by spreading or spraying, do not require advanced preparation and do not contain proteins so carry lower risk of infection or adverse reaction.

The Sealantis technology platform has multiple synergies with AMS, most notably within the sales, marketing, regulatory and operational areas, and the acquisition significantly strengthens the Company’s product portfolio for internal sealants and fixation devices, sitting alongside AMS’s LiquiBandFix8® laparoscopic and LiquiBandFix8® open fixation devices. The addition of the Sealantis products and indications will open up much larger parts of the surgery market for AMS to exploit commercially and significant sales synergies are anticipated once commercialisation commences from H1 2021.

AMS plans to rapidly maximise the value of the investment by continuing to invest in the existing Sealantis innovation centre and accelerate the commercialisation of the laparoscopic and open variants of Seal-G by running clinical trials for anastomotic leak prevention as well as obtaining approval for new indications. The Company expects to make a total investment of approximately £8m in R&D, regulatory and clinical costs which will be fairly evenly spread over the next three years, depending on clinical trial progress. Seal G will initially be targeted within Europe using AMS’s existing regulatory expertise and the Group’s extensive commercial footprint.

Sealantis operates a state-of-the-art innovation and manufacturing facility, which includes an ISO class 6 clean room, at the world-renowned Technion – Israel Institute of Technology, in Haifa, Israel. AMS intends to retain Sealantis’ team of 12 R&D staff, who will become a key part of AMS’s surgical R&D capability.

Terms of the transaction
AMS is acquiring Sealantis for an initial consideration of $US 25m (approximately £19m) in cash, to be funded from existing cash resources, which were £71m at 30 June 2018. In addition, AMS will pay royalties, in-line with market rates, on future sales of existing products in development until the end of 2027.

Until the commencement of product sales, which are expected in H1 2021, the acquisition is expected to be earnings dilutive due to the aforementioned investment in R&D, regulatory costs, and clinical studies.

Commenting on the acquisition, Chris Meredith, CEO of AMS, said: “This acquisition is in line with our strategy to acquire technologies that are complementary to our surgical portfolio as well as allowing us to leverage our global routes to market. The acquisition enhances our access to a significant and high-margin market in internal surgery, which includes areas of unmet need for effective and absorbable internal sealants, a market estimated at $1 billion. We are particularly excited to welcome Sealantis’ innovation team of R&D experts to AMS and look forward to working alongside them to develop the technology in a wide range of potential applications and indications. As we work towards the commercialisation of Seal-G Surgical Sealant over the next 18 months, we expect to maximise the full value of the platform and this innovative technology. AMS continues to actively monitor and evaluate other acquisition opportunities to capitalise on its strong financial and strategic position.”

Cohera Medical, Inc.® Files for CE Mark Approval for Sylys® Surgical Sealant

PITTSBURGH, May 15, 2014 /PRNewswire/ -- Cohera Medical, Inc.^®, a leading innovator and developer of absorbable surgical adhesives and sealants, announced today that it has applied for CE Mark approval for Sylys^® Surgical Sealant, the first synthetic sealant designed specifically to help reduce anastomotic leaks in gastrointestinal procedures.  CE Mark approval, expected by the end of 2014 based on this filing, will allow for marketing of the product in the European Union and other countries.

Sylys is applied during gastrointestinal procedures to help prevent the occurrence of anastomotic leaks – a serious complication that occurs in up to 23 percent of patients undergoing colorectal surgery. At least one-third of the post-surgical mortality after colorectal surgery is attributed to leaks, and survivors generally have protracted recoveries. The additional care required to manage this serious complication can cause up to a five-fold increase in patient management costs.

"Anastomotic leakage is the most devastating complication associated with intestinal resection, contributing to morbidity and mortality," said James McCormick, DO, FACS, FASCRS, Chief, Division of Colorectal Surgery, The Western Pennsylvania Hospital. "We have made tremendous strides in curtailing the risk associated with intestinal anastomosis, but we are always striving for further improvement and greater patient safety."

Sylys is designed to help reduce anastomotic leakage in intestinal procedures by providing additional support during the first few days of healing, when the development of leaks is most likely to occur.  The sealant is applied as a viscous fluid that cures rapidly to create a flexible, elastic seal over the anastomosis site.

"The preparation and filing of the CE Mark application for Sylys, a Class III implant technology, represents a significant milestone and achievement by all of the employees of Cohera Medical," said Chad A. Coberly, JD, Vice President of Clinical, Regulatory and Legal Affairs for Cohera Medical. "The submission signifies that we have completed the rigorous clinical and pre-clinical testing, quality, and performance requirements of the EU authorities, and we look forward to working with our notified body during the approval process."

The market for Sylys is significant, with several hundred thousand procedures a year worldwide representing a multi-billion dollar opportunity. Due to the unmet clinical need, Sylys would represent a breakthrough in this market that will lead to improved patient outcomes as well as reduced patient management costs for healthcare providers.

"Submitting the Sylys CE Mark application represents a significant milestone towards the commercialization of our second product and demonstrates the commitment we have to our future customers, partners, and investors," said Patrick Daly, Cohera Medical president and CEO. "We look forward to making Sylys available to surgeons and patients throughout the world."