York Pharma of the UK is splashing out £22.6 million to get hold of the sales and global commercial rights of two leading wound infection treatments from Belgium’s Solvay and has agreed terms for a financing package to fund the deal.

The two products, Flammazine (silver sulfadiazine) and Flammacerium (silver sulfadiazine/cerium nitrate) are indicated for the prevention and treatment of burn wounds and topical wound infections. They are currently approved and sold in 21 countries and generate combined annual revenues of about £8.5 million and as part of the deal, Solvay will be providing York with finished product for five years.

York noted that sales of Flammazine and Flammacerium are concentrated in France, Germany, Belgium and Spain and the acquisition will provide the UK firm with an opportunity to grow their sales in these key territories and elsewhere. It is especially interested in promoting the products in the North American market, “where the company plans to exploit the orphan drug designation for Flammacerium”, the firm said.

The deal is of vital importance to York as it will leverage its sales and marketing infrastructure and “will enable the company to become self-financing in the first full year of trading following the acquisition”, the London-headquartered group added.

York also noted that it has sorted out a $48 million package to fund the acquisition, through the issuance of $25 million of senior secured non-convertible notes and $23 million of subordinated convertible debentures.

Additional funding of £3.9 million has been raised through a conditional institutional placing by FinnCap of 8.9 million York shares. The proceeds will be used to fund the Solvay deal and provide working capital for the enlarged group, the company added.

Terry Sadler, York’s chief executive, said that the “two well-established products” represent the “gold standard” of treatment within their sphere of use. They will “accelerate the company’s transition to profitability”, he added, and “moves our business firmly towards its primary corporate objective of becoming an established and profitable international dermatology business”.

Investors were certainly impressed and York shares climbed 7.5% to 43 pence.