SmartPill Corp., the Buffalo medical device developer that makes an ingestible wireless medical sensor, has been acquired by an Israeli company that makes a similar device in a $6 million deal.
SmartPill’s ingestible wireless medical sensor is about the size of a large vitamin. It can be swallowed by a patient, allowing physicians to measure conditions, such as acidity, pressure and how long it takes to pass through the digestive tract.
Given Imaging, which is based in Yokneam, Israel, makes an ingestible pill-sized camera that can be used to diagnose digestive ailments, especially in the colon.
“SmartPill is an excellent strategic fit with Given Imaging’s proprietary technology and extensive portfolio of gastrointestinal diagnostic tools,” said Homi Shamir, Given Imaging’s president and chief executive officer, in a statement.
SmartPill is one of the more prominent medical device manufacturers based in the Buffalo Niagara Medical Campus. It shifted its manufacturing to the medical campus from California four years ago.
But the deal is likely to be a painful one for SmartPill’s investors, who have pumped more than $60 million in funding into the company since it was founded in 2003. The $6 million cash purchase price is just 10 percent of that sum. The terms of the deal also allow the proceeds to increase if SmartPill’s sales hit certain targets between 2013 and 2016. Given Imaging said those extra payments, if any, are not expected to be significant.
Officials from SmartPill and a spokesman for Given Imaging could not be reached to comment Friday on how the deal will affect SmartPill’s local operations, or its roughly 20 employees.
Given Imaging said in the statement that it plans to invest in “market development activities” to expand awareness of the SmartPill product and provide more clinical evidence of its effectiveness. Those investments could include funding for clinical trials, market development and manufacturing efficiency, the company said.
Given Imaging had $179 million in sales last year, including nearly $2 million in revenues from its PillCam Colon capsule, which takes images of the gastrointestinal tract as it moves through the colon.
Given Imaging said it expects SmartPill to generate revenues in the “low single-digit” millions of dollars next year.