Wednesday, May 24, 2023
Artivion, Inc., a leading cardiac and vascular surgery company focused on aortic disease, today announced that the U.S. Food and Drug Administration (FDA) granted premarket application (PMA) approval of PERCLOT Absorbable Hemostatic System ("PerClot") for use to control bleeding in certain open and laparoscopic surgical procedures. Artivion sold the PerClot product line to Baxter International Inc. ("Baxter"), (NYSE: BAX), in July 2021. Pursuant to the terms of its previously announced agreements with Baxter, Artivion will transfer ownership of the PMA to Baxter following approval. Shipment of PerClot product to Baxter will commence upon receipt of a milestone payment of $18.75 million in cash, $4.5 million of which will be paid to Artivion's former partner Starch Medical, Inc. ("SMI").
Under the terms of its agreements with Baxter, Artivion will supply Baxter with PerClot for a minimum of twenty-one (21) months, until manufacturing operations are transferred in full to Baxter or its designee.
"We are excited to receive FDA approval of PerClot, which represents a significant step forward in optimizing patient care by addressing intraoperative bleeding" said Pat Mackin, Chairman, President, and Chief Executive Officer of Artivion. "We continue to see Baxter as the perfect partner to commercialize PerClot due to its expertise in blood management and its strong hemostat portfolio, with corresponding customer relationships. The sale of PerClot to Baxter and the recent FDA approval mark the culmination of years of hard work and collaboration across many dedicated teams, and we are proud to have played a part in bringing this product to market."
Steve Wallace, President of Baxter's Advanced Surgery business added, "I would like to thank the team at Artivion for their partnership throughout the FDA review and approval process. The addition of PerClot to Baxter's portfolio further enhances our ability to optimize patient care by addressing a broad range of intraoperative bleeding with both active and passive hemostatic solutions."
With this latest milestone payment following FDA PMA approval for PerClot, Baxter will have paid approximately $44 million in cash to Artivion, of which $10.5 million was paid to SMI. Under the agreements, Baxter may make future payments as outlined below:
Artivion intends to use the net proceeds from the transaction for general corporate purposes, contingent consideration obligations, and potential debt repayment.