Surmodics Signs Distribution Deal with Abbott Worth Up to $92M

The deal, which largely involves Surmodics' SurVeil drug-coated balloon, would give Abbott worldwide commercialization rights once the device receives FDA approval.

Eden Prairie-based drug delivery technologies company Surmodics has locked down a distribution deal—its first ever—with the medical device behemoth Abbott Laboratories.
The partnership could be fruitful for both sides: Surmodics stands to net as much as $92 million, while Abbott receives exclusive commercialization rights to Surmodics’ SurVeil device—essentially a drug-coated balloon aimed at treating peripheral artery disease (PAD) in the upper leg.
An estimated 200 million people worldwide suffer from PAD, most of which are 40 or older. The circulatory disease is caused by plaque buildup on artery walls and can lead to severe leg pain, kidney failure and even leg or foot amputation. The SurVeil drug-coated balloon is now on to a second pivotal trial, according to the Star Tribune. If patient testing is successful, the device will be on track for FDA approval sometime in 2020.
Abbott would then hold control over the sales of SurVeil on a global scale. Meanwhile, Surmodics would be responsible for the manufacture and supply of clinical and commercial quantities of the device, per the two’s agreement.
Upfront, Surmodics is receiving $25 million from Abbott, the companies said in a joint statement. Thereafter, Surmodics stands to earn an additional $67 million if it hits “various product development milestones.”
“We are excited to enter this partnership with Abbott given its deep expertise in vascular care products and its worldwide strength in the market,” said Gary Maharaj, president and CEO of Surmodics, in prepared remarks. “The SurVeil drug-coated balloon is the first device developed by Surmodics that combines our proprietary drug-delivery and surface technologies with our exceptional design, development and manufacturing capabilities.”
However, the partnership doesn’t stop at the SurVeil device.
Abbott also received the option to negotiate agreements for Surmodics’ below-the-knee and arteriovenous fistula drug-coated balloon products. Both are currently in the pre-clinical stage.
“This agreement enhances our fast-growing endovascular portfolio, and we look forward to offering this solution to physicians to give them more and better options,” said Chuck Brynelson, senior vice president of Abbott’s vascular business, in a statement.
By annual revenue, Abbott Park, Illinois-based Abbott ranks as the tenth-largest medical device company in the world. The company grew in size considerably last year after acquiring one of Minnesota’s Fortune 500 companies, St. Jude Medical, for $25 billion.
Following Tuesday’s partnership announcement with Abbott, shares of Surmodics jumped more than $2.50, or nearly 10 percent, to $29.90. Abbott stock, however, remained flat, finishing out Tuesday at $60.61 a share.