SurModics in $200M licensing deal with Roche

Roche could pay SurModics more than $200M in return for long-lasting drug delivery rights

• On 11:18 am EDT, Tuesday October 6, 2009

EDEN PRAIRIE, Minn. (AP) -- SurModics Inc. said Tuesday it licensed drug delivery technology to Roche, and Roche's Genentech unit, in a deal that could be worth more than $200 million.

The news sent SurModics shares climbing $5.97, or 24.6 percent, to $30.24 in morning trading. The stock has traded between $15.96 and $30.75 over the past year, and is off nearly 4 percent since the start of the year.

The agreement gives Roche and Genentech an exclusive license to use biodegradable microparticles developed by SurModics. They plan to use the products in a long-lasting version of their macular degeneration drug Lucentis. SurModics will get $3.5 million upfront in the deal, and could get about $200 million in fees and milestone payments.

SurModics will also receive royalties on sales if the product is approved. Roche and Gentench will pay SurModics for development services, and may also obtain manufacturing services from the Eden Prairie, Minn., company.

Roche, based in Switzerland, is one of the world's biggest drugmakers. It acquired San Francisco biotechnology company Genentech in 2008.