London and Nasdaq-listed drugs maker Shire has agreed to buy Advanced BioHealing (ABH), which treats foot ulcers and is backed by medical device maker Safeguard Scientifics, for $750m in cash ahead of the target’s flotation.
The purchase price gives a 13 times return for Safeguard, which invested $26m in ABH alongside venture capital firms Canaan Partners, Wheatley Partners CDIB Bioscience Ventures, Channel Medical Partners, Horizon Technology Finance and Red Abbey Venture Partners.
In its filing ahead of listing, Safeguard owns 1.59 million shares, 28.1% of Advanced BioHealing, while venture capital firms Canaan Partners and Wheatley Partners own 40.7% and 14.7%, respectively.
Advanced BioHealing business will become part of Shire’s Specialty Pharmaceuticals business, led by Mike Cola, and will leverage biologic manufacturing expertise from Shire’s Human Genetic Therapies business.
Cola said: "The potential to build on the success of DermaGraft is attractive; it’s already a leading product providing a solution for a common complication suffered by diabetics in the US that, if not treated effectively, can lead to lower limb amputation and high cost to patients and society."