Despite the financial crisis swamping the markets, the UK’s York Pharma has managed to raise $51.2 million in a placement, which will help finance the purchase of its previously-announced acquisition of two leading wound infection treatments from Belgium’s Solvay.

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. York is forking out £22.6 million for the treatments, which are currently sold in 21 countries and generate combined annual revenues of about £8.5 million. As part of the deal, Solvay will be providing York with finished product for five years.

Most striking though is the financial package that York has sorted to finance the deal and support future operations, which chief executive Terry Sadler says will leverage the London-headquartered firm’s existing sales and marketing infrastructure. It will also “enable us to become self financing during the first full year of operations post closing,” he added.

The financing of the acquisition included an institutional placing to existing York shareholders of $7.18 million and a $44.02 million loan in senior secured debt and convertible notes. The lead placement agent was Rodman & Renshaw and Alex Charlton, speaking on behalf of the investment bank, said that “the capital and credit markets may be in turmoil but investors are still actively seeking opportunities to participate in the right deals”.

Mr Sadler said that “by definition the life sciences industry is driven by innovation and science”, but added that “there is also room for common-sense acquisitions that provide revenues today”. These deals need to pass “a relatively simple test of business common sense”, Mr Sadler went on. They need to be “easily described and understood in a few sentences…a good fit with our existing business, favourably valued and most importantly appear well positioned to help us make money for our shareholders”.

York estimates the worldwide market for topical anti-infective products to be $445 million and while sales of Flammazine and Flammacerium are concentrated in France, Germany, Belgium and Spain, “now we intend to access the lucrative North American market”, Mr Sadler concluded. The push will be led by Flammacerium, he said, as it is “a novel product which has an orphan drug designation”.