Partner Company Overview
Advanced BioHealing (ABH) is a regenerative medicine company which develops, manufactures and commercializes living cell-based therapies.
ABH manufactures and markets Dermagraft®, a bio-engineered living skin substitute that assists in restoring damaged tissue and supports the body’s natural healing process. Dermagraft is FDA approved to treat diabetic foot ulcers. Dermagraft also is the focus of an ongoing pivotal trial to assess the product's safety and efficacy in the promotion of healing venous leg ulcers.
Partnering with Safeguard
In February 2007, Safeguard Scientifics led a $25.5 million Series C financing round for ABH to complete the launch and expand the market for its FDA-approved product Dermagraft®, for the treatment of full-thickness diabetic foot ulcers. Safeguard deployed capital in ABH because it saw an incredible market opportunity for ABH’s regenerative medicine products.
During its more than four years as a Safeguard partner company, ABH increased revenues from a standstill to $146.7 million in 2010, representing an annual compound growth rate of 103% (2007-2010). In addition, the company established robust commercial and scaled cell-based manufacturing infrastructures with high-margin products that have excellent reimbursement fundamentals.
By partnering with Safeguard, ABH was able to take advantage of the unique regenerative medicine market. Dermagraft became the market leader in the metabolically active segment of wound healing, and ABH became distinctively positioned due to its ability to supply a unique value opportunity with a commercially successful business model in cell therapy. ABH transformed the way diabetic foot ulcers are being treated, while also offering a possibility to extend Dermagraft’s utility to other areas of wound healing.
“This tremendous achievement could not have been realized without the support of our investors and commitment of our employees. Four years ago, we started with a vision to transform the regenerative medicine marketplace. Today, we find ourselves embarking on an exciting chapter in our company’s history. Our goal is to improve the lives of our patients and their caregivers and believe that Shire is the perfect partner to augment this vision.”
Kevin Rakin,
Chairman and Chief Executive Officer, Advanced BioHealing (May 2011)
Results
In June 2011, Shire acquired ABH for $750 million, in cash, on the eve of ABH’s IPO, a purchase price which represented a 25% premium to the mid-range of ABH’s IPO price. This generated aggregate cash proceeds for Safeguard of $145.8 million, representing a 13x cash-on-cash return for Safeguard.
Shire identified regenerative medicine as a new, significant growth opportunity, with unmet needs in select disease states that did not have adequate conventional therapies – such as wound healing, bone and tissue repair, and organ transplantation. Due to the tremendous progress and market penetration of Dermagraft, Shire viewed ABH as a valuable addition to its renowned portfolio of healthcare products.
As a result of ABH’s significant traction, Shire purchased ABH to create a new strategic platform based on tissue regeneration using cell-based therapies. This acquisition complemented Shire’s existing specialty focus and biologics manufacturing capability. ABH became the focal point of Shire’s new regenerative-medicine unit, driving Shire’s ambition in regenerative medicine.
