Abbott and Surmodics agreement announcement
On February 27, 2018, Abbott Laboratories (ABT) and Surmodics (SRDX) announced that the two companies have entered an agreement for the commercialization rights of Surmodics’ SurVeil DCB (drug-coated balloon) for the treatment of superficial femoral artery. As per the agreement, Abbott Laboratories will gain exclusive commercial rights for the SurVeil DCB, which is currently in clinical trials. Surmodics will supply the device to Abbott once approved.
Also, the agreement includes negotiation options for Abbott Laboratories for Surmodics’ pre-clinical development-stage DCBs for below-the-knee and AV (arteriovenous) fistula treatments. Both Abbott Laboratories and Surmodics will work together to gain marketing approval for these products in the United States and Europe through collaboration on product development, clinical trials, and regulatory activities.
The collaboration agreement between Abbott Laboratories and Surmodics will likely help advance Abbott’s vascular line of devices, which are used in the treatment of PAD (peripheral artery disease). In 4Q17, Abbott’s vascular business contributed the most to its overall revenues, as shown in the graph above.
Medtronic’s (MDT) IN.PACT DCB is one of the competing devices on the market that’s currently approved in the United States. In January 2018, Becton Dickinson (BDX) completed enrollment in its Lutonix DCB trial for the below-the-knee indication.
Financial terms of the deal
As per the agreement, Surmodics will receive an upfront payment of $25 million and additional milestone-based payments of $67 million from Abbott Laboratories. Once the SurVeil DCB receives regulatory approval, Surmodics will manufacture and supply the device to Abbott Laboratories. Surmodics will receive the proceeds of the initial sale to Abbott Laboratories as well as a share of third-party sales profits.