Endologix and Nellix Endologix Inc. purchased a California stent manufacturer in a move that exec

Endologix and Nellix

Endologix Inc. purchased a California stent manufacturer in a move that executives claimwould boost the company’s aortic aneurysm treatment platform.

The deal for privately held Nellix Endovascular Inc. of Palo Alto, Calif., includes $15 million in stock and up to $39 million in milestone payments. The agreement includes a $15 million equity investment from Essex Woodlands Health Ventures, a majority shareholder of Nellix. The healthcare investment firm has offices in Palo Alto, Calif.; New York, N.Y.; Houston, Texas; and London, England. Endologix expects the deal to close in the last quarter of the year.

Endologix manufactures stents used to reinforce a ruptured or ballooning section of an artery. The Irvine, Calif.-based firm’s primary product, the Powerlink, treats abdominal aortic aneurysms, or a weakening of the wall in the aorta, the body’s largest artery. Powerlink is delivered through a catheter.

Nellix also makes devices that treat abdominal aortic aneurysms. The technology it has developed, according to a news release from Endologix, completely seals and fills an aortic aneurysm sac, preventing device migration. The product treats a wide range of abdominal aortic aneurysm (AAA) anatomies, including those that cannot be treated with existing endovascular aortic repair products. These hard-to-treat anatomies include patients with aortic neck lengths of 5 millimeters or less, widths as wide as 34 millimeters, and patients with iliac aneurysm diameters greater than 23 millimeters.

Endologix plans to use the $15 million equity investment to develop Nellix’s device for a European launch in 2012. It also will use the funds to develop a European sales force and start a U.S. clinical trial of the product.

According to John McDermott, Endologix president and CEO, Nellix has developed a new technology that will allow more physicians to treat a greater number of patients than existing technology options—which potentially could expand the global market for endovascular aneurysm repair (EVAR).

“We believe Nellix is the most revolutionary EVAR technology in the world and will help position Endologix as the innovation leader in aortic aneurysm treatment,”

McDermott said.

He also noted that the device has “exceptional clinical results” and that feedback from physicians has been positive, particularly as it relates to ease of use, effectiveness and versatility to treat both simple and complex aortic anatomies.

Nellix President and CEO Bob Mitchell said the acquisition will help maximize his company’s potential and broaden the company’s customer base.

“Endologix is the ideal partner to maximize Nellix’s potential and drive adoption of this device,” he said in a news release. “The Nellix technology has been developed in collaboration with physicians around the world and is the only AAA device that completely seals the aneurysm sac. Early clinical data suggest that the Nellix implant has the potential to dramatically reduce endoleaks, secondary interventions and long-term patient follow-up costs.”

Mitchell noted that the companies will be working in the short term to quickly build a sales force in the United States and Europe, in addition to looking for product-line expansion opportunities.

Essex Woodlands officials predicted the merger would create a “strong contender” for global leadership in the abdominal aortic aneurysm market.

“The combination of Endologix and Nellix creates a company that is poised for great success,” said Guido Neels, managing director of Essex Woodlands Health Ventures. “Nellix’s technology and Endologix’s track record make the company a strong contender for global leadership in the AAA field. The combined company has a strong management team and [our] funding puts them in an excellent position to achieve their clinical and commercial objectives and execute their growth strategy.”