British specialty pharma company BTG to buy PneumRx Inc for up to $475 mn

British specialty pharma company BTG Plc is buying US lung device company PneumRx Inc for up to $475 million in cash.

BTG will pay an initial $230 million and up to $245 million in performance-related future milestone payments.

The London-based company said that the acquisition ''will be funded in part by a cash-box placing with gross proceeds of approximately £150 million, representing approximately 5 per cent of the company's market capitalisation based on 3 December 2014.''

Privately-owned Mountain View, California-based PneumRx manufactures RePneu Coil System, a minimally invasive treatment for advanced emphysema, which improves lung function and exercise capacity.

RePneu is sold in 11 European countries including Germany, Switzerland, Italy and Spain and is currently under clinical trial in the US.

BTG said that the acquisition will complement its interventional medicine platform expanding it into the emerging area of interventional pulmonology - a market with high unmet need and significant growth potential.

Emphysema is a progressive disease in which the natural architecture of the lungs is damaged and lung function is degraded. There are more than 10 million people in the US and the EU5

There is no cure, with the current standard of care seeking to relieve symptoms through drug therapy and pulmonary rehabilitation.

BTG is a specialist healthcare company that develops products to target critical care, cancer and other disorders. The company has diversified revenues from sales of its own products and from royalties on partnered products.

It operates in three business areas, interventional medicine, specialty pharmaceuticals and licensing.

Its interventional medicines include interventional oncology products used to treat patients with liver tumours and interventional vascular products used to treat patients with severe blood clots and patients with varicose veins in the great saphenous vein system of the leg.

Its specialty pharmaceutical products include antidotes to treat snake bites and toxicity associated with medicines used for heart conditions and cancer.

It develops its own products and in-license or acquires them from others and sells to its customers in the US and elsewhere.