BTG says interventional medicine buys could boost sales to $1 bln
LONDON (Reuters) - British pharmaceutical company BTG announced two deals on Thursday that it said could create an interventional medicine business with potential sales of $1 billion.
Chief Executive Louise Makin told Reuters the deals would more than double BTG's revenues in the fast-growing market of targeting specific areas rather than administering drugs to the whole body.
BTG added to its liver cancer treatments by agreeing to buy the targeted therapies division of Nordion Inc for about $200 million, adding Therasphere radioactive glass beads to its chemotherapy beads unit.
It is also buying EKOS Corp for an initial $180 million, plus up to $40 million in future payments, to gain a treatment for severe blood clots, which can be fatal if they cause a pulmonary embolism.
Some of the cost of buying the Nordion unit will come from the placing of 32.8 million new shares, representing just under 10 percent of BTG's share capital, BTG said.
"Together we can see we are going to have the potential to build a $1 billion business," Makin said in an interview on Thursday. "We are going to have the important products for the vascular surgeons, the interventional radiologists and the interventional cardiologists."
Shares in the group were trading 0.2 percent lower at 338 pence by 11:49 GMT, outperforming a 2.2 percent weaker mid-cap index.
Analysts Savvas Neophytou at Panmure Gordon and Peel Hunt's Paul Cuddon both upgraded BTG to "buy" from "hold" on the back of the deals.
Cuddon said he did not expect the acquisitions to boost earnings in the next two years but in the longer term they could make BTG "a more compelling M&A target with critical mass in interventional medicine."
RADIOTHERAPY AND CHEMOTHERAPY
Makin said Therasphere would complement the Biocompatibles chemotherapy beads business it bought two years ago, giving it targeted delivery systems for both radiotherapy and drugs.
Liver tumors, the world's third most common cancer, respond well to targeted treatments because the organ's detoxification function can hamper conventional drugs.
EKOS Corp's EkoSonic product was also a good fit, Makin said, because the doctors that treat deep vein thrombosis were also potential customers for BTG's Varisolve treatment for varicose veins, which has been filed for regulatory approval.
"Varisolve they will be using in the clinic and EkoSonic when they are in the hospital," she said.
EkoSonic had sales of $28 million last year, but was growing at around 30 percent a year, she said, and had the potential to reach more than $100 million in sales.
(Editing by Ruth Pitchford)