Injecting strength into the business

ESSEN, Germany—Evonik Industries AG made another purchasedesigned to strengthen and expand its North America presence in the formulationand injectables space when it recently bought SurModics Pharma. The deal forthe division of the Minnesota company became official Nov. 17.

SurModics Inc. is a provider of surface modificationtechnologies to the healthcare industry. SurModics Pharmaceuticals Inc., anaffiliate of SurModics Inc., is a leader in injectable drug delivery systems.The company designs and produces bio-resorbable polymers (marketed under thebrand Lakeshore Biomaterials) and possesses expertise and facilities to carryout all phases of pharmaceutical product development up to commercial manufacturing.

The business focuses on the development of injectable drugdelivery systems that systemically or locally release active pharmaceuticalingredients within a period of up to several months. Formulation approachesinclude bio-resorbable microparticles, nanoparticles, liposomes, implants andother polymer-based configurations.

Under the terms of the sale, the entire portfolio ofproducts and services of SurModics Pharmaceuticals, including the company'scGMP development and manufacturing facility located in Birmingham, Ala., hasbeen acquired by Evonik for $30 million in cash.

Evonik's purchase of the company includes two facilities forthe development and manufacturing of polymers and drug delivery systems. Thecompany employs approximately 80pharmaceutical experts, and in 2010 saw total revenues that amounted to morethan $15 million.

"The completion of the sale of the Pharma assets completesan important milestone towards achieving our goal of returning SurModics tosustainable, long-term profitability. We now have significantly strengthenedour financial profile and are able to focus our full resources on advancing ourcore medical device and IVD businesses," said Gary Maharaj, president and CEOof SurModics, in a prepared statement. "We remain grateful for the hard work ofthe pharma employees and know they will achieve great success through thestrong strategic fit with Evonik."

SurModics partners with medical device, pharmaceutical andlife science companies to develop and commercialize products that result inimproved diagnosis and treatment for patients. Its core offerings includesurface modification coating technologies that impart lubricity, prohealing andbiocompatibility capabilities; components for in-vitro diagnostic test kits; and specialized surfaces forcell culture and microarrays. SurModics representatives were unavailable forfurther comment.

Evonik, a German specialty chemicals concern, focuses on thekey megatrends of health, nutrition, resource efficiency and globalization. Ithas a presence in more than 100 countries around the world and employs morethan 34,000 staff.

The purchase of SurModics comes at the end of a busy, yetstrategic, year for Evonik, as it acquired in March from Boehringer Ingelheimthat company's RESOMER polymers, which are used for controlled-releaseinjectables and bio-resorbable implants as well as in medical devices.

As a result of these purchases, Evonik has strengthened theformulation services segment of its business for pharmaceutical applications, allowingit to further plunge into the healthcare market.

"Evonik is a strategic partner and one of the world'sleading solution providers to the pharmaceutical industry. By acquiring thepolymer and formulation services businesses of SurModics, we continue to expandour position in this important market," said Dr. Klaus Engel, chairman ofEvonik's executive board, in a prepared statement.

With its Pharma Polymers product line, Evonik is a leadingdeveloper and producer of functional pharmaceutical excipients. Based on itsEUDRAGIT product portfolio, the company develops coatings and matrix systemsthat provide controlled release of active pharmaceutical ingredients in tabletsand other oral dosage forms.

"With the Lakeshore Biomaterials portfolio of polymersand associated range of established formulation development services, weacquire leading expertise and capabilities for the development andmanufacturing of innovative drug delivery solutions. This is a consistentextension of our current pharmaceutical product and service platform,"emphasized Dr. Jean-Luc Herbeaux, head of Evonik's healthcare business, in aprepared statement.