Medical Device Daily

SurModics (Eden Prairie, Minnesota), a provider of surface modification and drug delivery technologies to the medical device industry, reported acquiring the portion of InnoRx (Mobile, Alabama), a drug delivery company, which it did not already own.

InnoRx develops implantable intravitreal drug-loaded systems for ophthalmology.

Prior to the acquisition, SurModics held an ownership interest in InnoRx of less than 20%. To acquire the remaining interest, SurModics paid about $4.1 million in cash and issued around 600,000 shares of SurModics stock.

Upon completion of certain development and commercial milestones, the company may issue up to another 600,000 shares of stock. This structure includes milestones based on FDA approval, as well as achievement of pre-defined U.S. revenue targets from products that incorporate InnoRx's technology targeting age-related macular degeneration (AMD) and diabetic macular edema (DME).

InnoRx was founded by renowned retinal surgeon Eugene de Juan Jr., MD.

SurModics said it would establish a new ophthalmology business unit and continue development of InnoRx's drug-coated intravitreal implant as its lead product. The new unit will be located in Southern California, facilitating the continued involvement of InnoRx's development team and also be in proximity to de Juan, CEO of the Doheny Retina Institute at the University of Southern California Keck School of Medicine (Los Angeles). Founder and chairman of InnoRx, de Juan will be a clinical consultant to SurModics, supporting continued development of the technology.

The implant — the result of nearly three years of collaboration between SurModics and InnoRx — delivers drugs targeting AMD and DME in a sustained-release way for over a year. It is implanted using an in-clinic, rather than an operating room, procedure and may be removed once the drug has been fully released.

Currently, the majority of treatments being developed for AMD and DME require repeat injections into the eye every one to three months, often with a sub-optimal drug-dosing profile. Use of a single implant that provides long-term, controlled drug release represents an advance in therapeutic treatment, improved patient compliance, reduced side effects and greater efficacy, according to SurModics.

The InnoRx system is a technology that can be developed either by SurModics alone or with a partner using its own proprietary drug or targeting a specific indication.

The DME-targeted product recently completed successful preclinical studies, and InnoRx has filed an investigational new drug application with the FDA. Human trials are expected to begin in the first half of 2005. In addition to the intravitreal implant platform, other technologies also were acquired by SurModics in the deal.

de Juan said, “By leveraging SurModics' biomaterials and drug-delivery technologies and expertise and strong customer relationships, I believe we can make that vision a reality. Our combined strengths will improve and expand the applications for the technology, which will result in dramatic benefits to the patient.“

SurModics said that the acquisition extends its reach into the rapidly expanding ophthalmology arena. SurModics' initial focus will be to utilize InnoRx's technology to treat AMD and DME, retinal diseases affecting more than 15 million people in the U.S. and representing an opportunity projected to reach $2.5 billion to $7 billion within six years.

Bruce Barclay, SurModics' president and chief operating officer, said the deal “reflects our mutual commitment to solving the problem of sustained delivery of various therapies in the eye, a significant unmet clinical need. We believe that folding InnoRx into SurModics will accelerate our entry into an attractive market, strengthen our pipeline and deepen our ability to exploit the convergence of drugs and devices with multiple customers.“

Besides offering the potential for greater revenue, specific benefits of the deal for SurModics include: gaining control of a technology platform which may be leveraged with a variety of customers in additional product applications; and indications within ophthalmology and beyond; leveraging SurModics' expertise in biomaterials, drug delivery and product development; and capturing more elements of the value chain (the polymer, the device and, in some cases, the drug).