Corza Health Inc. has agreed to pay Takeda Pharmaceutical Co. Ltd. €350 million (US$409.8 million) in cash to acquire the Japanese drugmaker’s Tachosil fibrin sealant patch. The deal, which is expected to close by March 31, 2021, pending regulatory approvals, gives Corza Health a solid footing in the advanced wound care and closure market.
Based in Del Mar, Calif., Corza Health was founded in March 2019 as a partnership between private equity firm CTGR and health care industry veteran Gregory Lucier with the aim of acquiring companies and assets to build a market-leading health care business focused on the med-tech and life sciences sectors.
Lucier, who is CEO of Corza Health, brings years of expertise to the partnership. He is former General Electric executive who went on to build up Life Technologies Corp., a biotech company that was acquired by Thermo Fisher Scientific Inc. in 2014 for just under $15 billion. Following that, he served as chairman and CEO of Nuvasive Inc. He remains chairman of the spine surgery company.
The goal of the partnership was to combine Lucier’s expertise in med-tech and life sciences with GTCR’s success and insights in building health care companies and “find companies where you had a good management team in place, but maybe there was an insufficient amount of capital or connections to continue to build out their platform,” he told BioWorld.
Focus on wound closure
Tachosil fit the bill.
Approved for use with manual compression in adult and pediatric patients as an adjunct to hemostasis in cardiovascular and hepatic surgery when control of bleeding by standard surgical techniques is ineffective or impractical, it was one of the early innovators in hemostatic wound closure and already had a global footprint. In the fiscal year ended March 31, 2020, the Tachosil sealant patch netted sales of $160 million.
It was not, however, a product line that Takeda wanted to continue to support. In 2019, the pharma giant agreed to sell it to Ethicon Inc., a unit of New Brunswick, N.J.-based Johnson & Johnson. The companies canceled the deal due to antitrust concerns raised by the European Commission.
“This announcement continues Takeda’s strong momentum toward optimizing our portfolio for growth by delivering highly innovative medicines and transformative care in our chosen business areas, as well as meeting our leverage targets,” said Costa Saroukos, chief financial officer of Takeda. “As we continue to streamline and simplify our portfolio, Takeda is confident that we have found the right partner in Corza Health as the next home for Tachosil.”
Takeda will use the proceeds from the divestiture to draw down debt and advance its goal of two times net debt/adjusted EBITDA within fiscal years 2021 through 2023.
Under the agreement, Corza Health will acquire the assets and licenses that support the development and commercialization of Tachosil, while Takeda will maintain ownership of the manufacturing facility in Linz, Austria. Takeda has entered into a long-term agreement to serve as contract manufacturer for Tachosil products and supply them to Corza Health.
Takeda defended the sales tag on Tachosil. “Tachosil is a profitable, best-in-class product that is trusted by medical professionals worldwide, and we believe this transaction delivers a fair price and a good return on our investment,” a spokeswoman told BioWorld.
Lots of room for growth
Lucier sees the Tachosil franchise as a “fantastic” opportunity. “We’re going to invest heavily into the commercial infrastructure around the world to make it grow faster, and further, we’re going to add on a fair amount of mergers and acquisitions to build out the overall wound closure product line,” he said.
According to Lucier, the biological wound closure solutions market – ones that use thrombin, fibrin and other clotting agents – exceeds $2 billion. The dual-action patch category Tachosil represents comprises just about 3% of those solutions. That leaves 97% of the industry to “understand better, ultimately invest into, to build out a more comprehensive set of solutions for surgeons around the world.”
To that end, Corza Health is putting together a list of criteria for future acquisitions that complement the Tachosil dual-action patch. “We have a very robust pipeline,” he teased.
The company also plans to invest in additional clinical studies of Tachosil to support more on-label indications, with potential targets in neurosurgery and cardiovascular surgery.
Corza Health views Ethicon and Medtronic plc’s surgery business as its main competition. In addition to looking for new acquisitions, the company will pursue product development on its own. “We’ll be investing in the infrastructure to allow organic innovation,” with R&D staff and quality/regulatory hires, Lucier said.
Takeda partners with Foundation Medicine
Once the deal closes, about 60 Takeda employees will have the option to transition to Corza Health.
Separately, Takeda Pharmaceuticals USA, a wholly owned of subsidiary of Takeda Pharmaceutical, said it is working with Foundation Medicine Inc., of Cambridge, Mass., to develop the Foundationone CDx (tissue-based) and Foundationone Liquid CDx (blood-based) companion diagnostics for use with Takeda’s late-stage lung cancer portfolio. If approved, the appropriate companion diagnostics would be used to identify patients who may be eligible for mobocertinib, a drug candidate being assessed as a treatment for patients with epidermal growth factor receptor Exon20 insertion+ metastatic non-small cell lung cancer (mNSCLC) and Alunbrig (brigatinib), Takeda’s tyrosine kinase inhibitor, which was recently approved by the U.S. FDA for patients with TKI-naїve anaplastic lymphoma kinase-positive mNSCLC.