CryoLife said it owns nearly 2.4 million shares of Medafor stock, which cost it about $2.6 million, and could be due another $8.4 million "upon the release of funds held in escrow and the satisfaction of certain contingent milestones."
The deal for Medafor, which closed last week, calls for an up-front cash payment of $200 million for hemostat maker Medafor, plus another possible $80 million in milestones.
The companies announced the deal in August, with Bard saying it planned to use the merger to expand its Davol subsidiary’s reach into the operating suite.
"Medafor has a robust pipeline of potential future products that we expect will expand the use of this clinically proven and effective hemostat to control bleeding," the company said at the time, adding that it expected to add about 1% to its revenue growth forecast for 2014.
BCR shares were up 0.8% today, trading at $115.79 as of about 1:45 p.m.
"We are pleased that our modest investment in Medafor has yielded such a positive return for our shareholders. The proceeds from the transaction and the resulting gain of $12.5 million will be recorded in the 4th quarter 2013, and will contribute to the continued execution of our growth strategy and shareholder dividend," CryoLife chairman, president & CEO Steven Anderson said in prepared remarks. "The Medafor acquisition by Bard also provides strong validation of the significant market opportunity for our powdered hemostat, PerClot, which we believe has significant clinical advantages over the Medafor product. PerClot is currently approved in Europe and other select international markets. In the U.S. and Japan, we are moving forward on the regulatory pathway, with FDA approval to initiate the PerClot U.S. clinical trial expected before the end of 2013."