NeoTract, a US-based medical device producer, is to be acquired by medical device maker Teleflex for a total of $1.1bn, thus giving an exit to pharmaceutical group Johnson & Johnson.
Johnson & Johnson Development Corporation, a strategic investment arm of Johnson & Johnson, participated in NeoTract’s $28.1m funding round in 2009 alongside New Enterprise Associates and Quilvest Private Equity.
Founded in 2004, NeoTract has developed a minimally invasive device, UroLift, to treat lower urinary tract symptoms caused by an enlarged prostate gland, a condition known as benign prostatic hyperplasia (BPH).
The acquirer, Teleflex, is expected to pay $725m in cash upon closing of the deal, which is expected to take place within 30 days. The remaining $375m will be paid contingent on certain commercial milestones related to sales, which NeoTract is to meet by the end of 2020.
The medical devices and diagnostic space has seen a rising interest by corporate investors over the past four and a half years, as illustrated on the GCV Analytics chart below. While only an estimated $816m was committed across 38 corporate-backed rounds raised by such enterprises in 2013, the corresponding figures for 2016 were $2.34bn over 110 rounds, almost tripling both deal count and investment.
As for 2017, there have been 66 rounds for such companies involving at least one corporate investor, which already total $2.32bn. In light of these upward trends in the space, more sizeable exits from such enterprises like NeoTract’s $1.1bn acquisition are to be expected in the future.
