Southern Research Institute Spinout, Brookwood Pharmaceuticals, Acquired by SurModics for $62 Million

    BIRMINGHAM, Ala., Aug. 1 /PRNewswire-USNewswire/ -- Southern Research
 Institute officials today announced that the wholly-owned drug delivery
 company it created in 2005, Brookwood Pharmaceuticals, has been sold to
 SurModics, Inc. for a package worth up to $62 million -- $40 million in
 cash at closing and up to an additional $22 million in cash upon the
 successful achievement of specified milestones.
     Brookwood provides proprietary polymer-based technologies to companies
 developing improved pharmaceutical products. The company's operations and
 its approximately 70 employees will remain in Birmingham.
     "We have been very impressed by the success Art Tipton and the entire
 Brookwood team has achieved in its short history as an independent
 company," said John A. "Jack" Secrist, III, Ph.D., president and CEO of
 Southern Research Institute. "While we will miss having Brookwood as part
 of our extended organization, we are convinced that these two combined
 companies will be much more successful than they would apart. The
 Birmingham community has benefited from Brookwood's growth and presence,
 and we are very pleased that SurModics plans to retain Brookwood in
 Birmingham."
     Secrist added that even in the very early discussions with SurModics,
 Southern Research officials asked that the acquisition be favorable to
 Brookwood employees, provide a real opportunity for Brookwood to grow, and
 that there was an opportunity for Brookwood to remain in Birmingham.
     "This is a wonderful development for Southern Research, Brookwood, and
 Birmingham," said Carol Z. Garrison, Ph.D., chairman of the Southern
 Research board and president of the University of Alabama at Birmingham
 (UAB). "It speaks to the quality of the research pioneered at Southern
 Research Institute, as well as the Institute's fiscal health and strategic
 acumen."
     "The support that Brookwood received from Southern Research, UAB and
 the business community was consistent and enthusiastic," said Arthur J.
 Tipton, Ph.D., Brookwood president and CEO. "Our roots are here in
 Birmingham and I am excited about this transaction because it allows us to
 deepen those roots for Brookwood and its employees. I am equally excited
 that the moneys to Southern Research generated from this transaction -- the
 most significant one-time payment in its 65 year history -- will allow
 Southern Research to fund other bold initiatives to further its phenomenal
 history of innovation."
     In a press release issued earlier today by SurModics, Bruce Barclay,
 president and CEO said, "We are very excited to welcome the employees of
 Brookwood Pharmaceuticals to SurModics...The combination of broader
 technology platforms and a broader customer base in several large markets
 helps fulfill several of our strategic objectives, including achieving
 greater diversification in our business."
     Late in 2005, Southern Research spun out the organization's 30-year old
 in-house Pharmaceutical Formulations group which focused on the development
 of time-release formulations for pharmaceutical delivery. At the same time,
 Brookwood acquired the Ohio-based external polymer manufacturing business
 of Alkermes, Inc., and began operating that business as a Brookwood
 subsidiary called Lakeshore Biomaterials, Inc. In the second quarter of
 2007, Brookwood helped to create a new company, Aeon Biosciences, also
 based in Birmingham and included in this deal, which is working to develop
 a new cardiac stent.
     "Our primary focus, since forming Brookwood, has been to use strong
 technologies and the skills of a talented staff to develop improved drug
 delivery products," said Tipton. "Our enthusiasm for this transaction is
 that it furthers what we in the combined entity can offer clients and
 expands opportunities to develop novel products."
     Brookwood Pharmaceuticals will operate as a separate business unit of
 SurModics. Tipton will lead the team as Vice President of SurModics and
 President of Brookwood Pharmaceuticals, Inc. The company will remain in
 Birmingham. An important piece of Brookwood's business has been to supply
 biodegradable polymers through its subsidiary, Lakeshore Biomaterials,
 which will remain an important business focus in Birmingham.
     Brookwood generates revenue from research and development fees, polymer
 sales and royalty generating licenses. The company generated $12.7 million
 of revenue in calendar year 2006, more than tripling the 2004 revenue
 earned while it operated as an in-house department within Southern
 Research. Since its spinout, Brookwood has achieved strong year-over-year
 growth and, furthermore, Brookwood is profitable and cash flow positive.
     Brookwood's strength is in proprietary injectable microparticles and
 implant technology, both based on biodegradable polymer technology, to
 provide sustained drug delivery. The company currently has nearly 30
 customer paid development projects in progress from top pharmaceutical and
 medical device clients as well as smaller public and private companies.
 Customer projects target a number of key clinical indications in the
 diabetes, oncology, ophthalmology, cardiovascular, orthopedics, central
 nervous system and alcoholism markets, in addition to other fields.
     About Southern Research
     Southern Research Institute is an independent 501-(c)-3, not-for-profit
 center for scientific research. Founded in 1941, Southern Research is known
 for innovative leadership in preclinical drug discovery and development,
 environment and energy research, and advanced engineering. Public and
 private sector clients include the National Institutes for Health, the U.S.
 Departments of Justice, Defense, and Energy; the Environmental Protection
 Agency, and NASA, as well as major private and public companies in
 pharmaceutical, biotechnology, energy, manufacturing and more. For more
 information, visit http://www.SouthernResearch.org.
     Media Contacts:
     Rhonda Jung (205)581-2317          Risa Goldman Burgess (781)684-0770
     Southern Research Institute        Schwartz Communications
     Jung@SouthernResearch.org          southern@schwartz-pr.com
 
 

SOURCE Southern Research Institute