Ambu Enters Deal To Acquire MFS' Pain Pump Technology Rights

Ambu has signed an agreement with Israel-based Medical Flow Systems (MFS) regarding the acquisition of patents and manufacturing rights behind the design of pain pump technology of which Ambu has been a distributor in the US since 2010. The agreement implies that Ambu takes over the ownership of patents and manufacturing know-how. MFS will continue with the manufacturing process, aiming at a future integration with Ambu's global manufacturing setup.

For a number of years, MFS has been the developer and manufacturer of a number of FDA-cleared mechanical pain pumps for the medication of patients who are discharged from hospital. In parallel with the negotiations with MFS, Ambu has signed contracts with two major American GPOs in order to have the pain pump included in their contracts. According to Ambu, these two GPO contracts will be the gateway to a potential sale of pain pumps in the US at an amount of approximately US$80mn per year, and the acquisition of the previously mentioned patents will further growth potential to Ambu's range of products. The target group is the hospital as for Ambu's existing product programme.

The agreement with MFS entails that Ambu will pay US$2mn upon signing and subsequently US$8mn in royalties and milestone payments for a period of up to seven years. The acquisition will have no appreciable effect on Ambu's revenue and EBIT for its FY2014.

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Related sectors of this article: Medical Devices, Drug Delivery, MIW, M&A - Medical Devices
Geography: Israel, Denmark

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