Entellus Medical Strengthens Portfolio With $11M Post-Op Product Buy
Entellus Medical Inc. inked an $11 million deal to buy XeroGel, a post-operative product used to reduce bleeding and prevent adhesions following nasal surgery.
The med-tech business from Plymouth announced on Wednesday it would acquire the XeroGel assets from CogENT Therapeutics in an all-cash transaction. As part of the agreement, Entellus will assume manufacturing and marketing duties for XeroGel from the Hayward, California-based owner.
“We are pleased to secure ownership of this best-in-class nasal dressing technology,” said Entellus CEO Robert White in a statement. The deal will also enrich Entellus’ capabilities to sell products used during and after nasal operations.
With XeroGel in its pocket, White said the company would use “the opportunity to leverage our world class engineering team to explore potential innovations and future research and development projects.”
Entellus has received a significant amount of financial backing in its ten years of operation. Over a five-round span, the company received $92 million. Its most recent fundraising round, completed in 2011, ended with a $35 million investment from a team of five investors lead by Covidien, a med-tech company now owned by Medtronic.
Despite its fundraising success, the company has struggled to turn a profit. Since the company’s inception, Entellus has accumulated a $122.1 million deficit. It expects the trend to continue through its 2016 fiscal year with losses of $21 million to $29 million. According to Entellus’ annual report, the company has managed to finance its operations primarily through the completion of its IPO in 2015, sales of its products and other debt-related financing arrangements.
However, the company’s sales have consistently grown. Entellus expects revenue to grow as much as 25 percent this year compared to 2015, landing somewhere between $73 million and $77 million.