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Tuesday, May 24, 2022

Laguna Hills Device Maker Makes $500M+ Buy

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Laguna Hills-based Wallaby Medical LLC has purchased Bochum, Germany-based Phenox GmbH for approximately $528 million, a deal being described as one of the largest international transactions in the medical device industry in recent years.

Both medical technology companies develop products to treat hemorrhagic strokes, which occur when blood vessels in the brain become blocked by a clot, and ischemic strokes, which are characterized by bursting blood vessels in the brain.

The two companies have been partners since striking a deal in 2019, which granted Phenox the right to exclusively distribute Wallaby’s Avenir Coil System, which is designed to treat intracranial aneurysms and other neurovascular abnormalities, as well as its Esperance Aspiration Catheters, which are cleared in the U.S. and China to treat ischemic strokes.

“The acquisition is a natural next step in the relationship of both companies and a transformational step in achieving our vision of saving the most lives affected by stroke,” Wallaby CEO Michael Alper said in a statement.

As part of the transaction, Wallaby also acquired Phenox’s femtos GmbH, which develops and manufactures neurovascular devices, stents, and other implantable devices.

China Ties

Wallaby Medical—founded in 2015—operates a 7,200-square-foot R&D; facility at its Laguna Hills headquarters and a 180,000-square-foot plant in Shanghai.

Between both countries, Wallaby employs about 300 people.

Phenox, established in 2005, makes neurovascular devices to treat ischemic strokes, hemorrhagic strokes, and intracranial aneurysms. Its products are marketed in over 45 countries. Along with Germany, the company has offices in Italy, the U.K., Ireland and the U.S.

Series D Funds

According to officials, Wallaby’s acquisition was funded with the proceeds from its Series D financing round, although neither the funding amount nor the date of the round has been disclosed.

In 2020, the company raised $45 million in a Series C round led by Marin County-based GL Ventures, which says it invests in companies with $500,000 to $50 million in annual sales and has proprietary technologies.

Another investor in that round was Sinovation Ventures, a Chinese venture capital firm with $3 billion assets under management and over 400 portfolio companies in China.

Combined Company

Once the companies completely integrate, Wallaby-Phenox will develop neurovascular technologies for the U.S., China, Europe and Japan markets.

Alper will take the CEO position of the combined companies, while Phenox Founder Dr. Hermann Mondstadt will assume the role of managing director.

“Over the last 17 years, we have built a company that is committed to delivering optimal solutions for our customers and patients,” Mondstadt said. “This transaction will enable Phenox’s technology to be further developed with Wallaby’s strong resources while also allowing Phenox’s products to reach new markets, and creating significant opportunities for the combined company.”

“The broadened product portfolio, enhanced R&D; capability and expanded geographic coverage will provide Wallaby-Phenox with an unparalleled competitive edge as we strive to become a global leader in the neurovascular market,” Alper added.

Once fully integrated, the combined company says it plans to go public, but officials have yet to disclose a timeline for such a move.

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Audrey Kemp
Audrey Kemp
Audrey Kemp is a staff reporter and occasional photojournalist for the Orange County Business Journal. Her beats include — but are not limited to — healthcare, startups, and education. While pursuing her bachelors in literary journalism at UC Irvine, she interned for New York-based magazine Narratively Inc., wrote for Costa Mesa-based lifestyle magazine Locale, and covered the underground music scene for two SoCal-based music publications. She is an unwavering defendant of the emdash and the Oxford comma.

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