Is there any reason why you think there was no bid for PNV and...

Is there any reason why you think there was no bid for PNV and they chose to go for the fish skin?

Yes, I think there are multiple reasons.

Private v. Public. Kerecis was a private, rather than listed company, like PolyNovo. Privately-held companies are more popular takeover targets.

Keeping it local. My observation is that more “local” companies are generally favoured for acquisition. For example, American companies tend to acquire other American companies, German-speaking companies favour acquisition of companies based in the DACH territories etc. The companies less likely to follow this trend are big pharma with a wide international footprint.

One of the key reasons given by Denmark-based Coloplast for the (Iceland-based) Kerecis acquisition was Strong cultural fit, rooted in shared Nordic origins and sustainability leadership.

If my thinking is correct, Australian biotechs are less likely to be considered for acquisition. And if they are, the acquirer is more likely to be a big pharma with a global footprint. In all five Australian biotech acquisitions that I can think of, that was indeed the case.

Bang for buck. Coloplast paid A$1.8bn with a further ~A$200m contingent on sales targets for 2023 being met. Kerecis revenue in 2021/22 was A$ 113m, compared with PolyNovo’s 2021/22 revenue of A$37.6m.

Cash in the kitty. Kerecis brought in over A$100m cash in a funding round in H2 2022.

Cash flow positive. Kerecis was cash flow positive by 2021/22, with ~US 1m EBIT. PolyNovo wasn’t.

Complementarity on geographical footprint and product portfolios. This was another reason given by Coloplast. Coloplast’s existing wound products focused on management of wound exudate. Kerecis products were strong in chronic wounds, although their products are FDA- cleared for multiple other indications. Also, Coloplast appeared to be particularly drawn to US market-derived revenue. 98% of Kerecis sales in 2021/22 (A$111m) were in the US, compared with PolyNovo US sales of A$32m.

Outpatient insurance coverage. PolyNovo is still to receive a code for outpatient insurance coverage of its SynPath product for chronic wounds. Kerecis already has it. Prior to acquisition, over 150 million Americans had insurance coverage for Kerecis. That number is expected now to have grown to almost 200 million.

Established longer. Kerecis first received EC mark in 2012, followed by first FDA clearance in 2013.

Larger product range. At the time of acquisition, Kerecis already had 12 commercialized products.

So, yes, qite a few reasons....

By the way, I think Coloplast did well by acquiring Kerecis. I think it’s destined to become the leading biologic skin product.

https://www.kerecis.com/coloplast-a...cis-and-raises-long-term-growth-expectations/

https://www.kerecis.com/100-million...cal-fish-skin-company-kerecis-at-620-million/

https://www.kerecis.com/

https://www.medicaldevice-network.c...o-catch-fish-skin-wound-care-company-kerecis/

More Than 150 Million Americans Now Have Insurance Coverage for Kerecis’ Medical-Fish-Skin Wound Treatment | Business Wire