Devices & Diagnostics

SurModics gets $30M in cash for pharmaceuticals business

SurModics Inc. (NASDAQ:SRDX), the Eden Prairie, Minnesota maker of drug-delivery and surface-modification technologies for medical devices, will sell off its pharmaceuticals business for $30 million in much-needed cash. The company announced today that its portfolio of pharmaceutical services, including its Birmingham, Alabama manufacturing facility, will be acquired by Evonik Industries AG, a specialty chemicals company […]

SurModics Inc. (NASDAQ:SRDX), the Eden Prairie, Minnesota maker of drug-delivery and surface-modification technologies for medical devices, will sell off its pharmaceuticals business for $30 million in much-needed cash.

The company announced today that its portfolio of pharmaceutical services, including its Birmingham, Alabama manufacturing facility, will be acquired by Evonik Industries AG, a specialty chemicals company in Germany that develops coatings and matrix systems for controlled release of active ingredients in oral pharmaceuticals. Evonik completed another oral drug delivery acquisition in March, so this move, the company said in a statement, will help it expand its position in the pharmaceuticals market.

SurModics President and CEO Gary Maharaj said the sale was important in achieving SurModics’ goal of returning itself to “sustainable, long-term profitability” by allowing the company to focus on advancing its core medical device and in vitro diagnostics businesses.

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That, and it could use the cash. The company first announced in December it would explore a sale of its pharmaceuticals business and said in January it expected to lose $10 million this year operating the Birmingham facility.

And the past few years have been full of even more challenges for the company. It’s experienced falling sales and profits from a terminated agreement with Merck in 2008 and Johnson & Johnson’s discontinuation of its drug-eluding stents, which used SurModics’ polymer coating technology, earlier this year. It cut 13 percent of its workforce in October of last year and another 9 percent in August, including its CFO. It lost its CEO Bruce Barclay in June 2010 and had some conflict with its biggest shareholder Ramius.

Whether the proceeds from the sale can indeed help SurModics secure a “sustainable, long-term profitability” remains to be seen. A call to the company was not immediately returned. But shares were up to $10.91 at the time of publishing, after closing at $10.15 on Tuesday.