San Antonio — CytoBioScience, a startup that sells a device used to screen drug formulations, has plans to merge with a Minnesota-based medical device maker that’s traded on the Nasdaq market for companies with smaller market capitalizations.
CytoBioScience announced today it signed a letter of intent to merge with Eagan, MN-based Skyline Medical (NASDAQ: SKLN), and the companies hope to finish the deal by Sept. 30. The companies haven’t revealed much detail yet about why they’re merging or how it will affect the businesses, and CytoBioScience CEO Jim Garvin declined to comment on plans for the merger until after both businesses discuss plans with Nasdaq. The company is traded on the Nasdaq Capital Market, which was formerly known as the Nasdaq SmallCap Market.
That Skyline is traded in the public markets is potentially useful in terms of having better access to capital, Garvin says. He added that CytoBioScience plans to grow its presence in San Antonio, though he declined to comment on if or how Skyline might help the company do so. Joining together will help increase the client base for both businesses, the companies wrote in a press release.
CytoBioScience has shown willingness to strike a deal if it can find one that complements its own technology. In December, the company made a “multi-million dollar” acquisition of Soluble Therapeutics, a Birmingham, AL, company that offers a different drug screening technology.
Though both CytoBioScience and Skyline sell products in the healthcare space, it isn’t clear yet if or how the merged business will somehow sell them together. But the companies’ respective technologies might be complementary in other ways. Garvin argues that there’s a connection between the products in that they’re focused on helping patient outcomes. Additionally, he says that the companies plan to explore whether CytoBioscience’s high-throughput device for screening the safety and efficacy of drug formulations might benefit from a byproduct of Skyline’s work.
Skyline sells a product called the Streamway System, which automatically collects and disposes potentially hazardous bodily fluids produced during and after surgery. The company, which had previously achieved regulatory nods to sell the disposal system in the U.S. and Canada, received approval in June to sell the product in Europe. The company reported $456,495 in revenue in 2016, down 30.2 percent from the prior year.
CytoBioScience’s device, the CytoPatch, aims to help scientists observe how multiple drug formulations might interact with a cell’s ion channel. Garvin says the merged companies will examine whether any materials that Skyline gathers in its system, such as cells or tissues, could be used for CytoBioScience’s research.
The base CytoPatch unit sells for $175,000, and CytoBioScience also sells microchips, buffers, solutions, cells, and specific types of shipping containers to researchers on a recurring basis, Garvin says. CytoBioscience, which changed its name last year, was founded in Germany and moved to San Antonio in 2015. Regulatory filings show CytoBioScience had raised about $15.8 million as of August 2016.
Skyline’s product allows for the potentially infectious human fluids to be continuously collected and disposed of, whereas traditional methods used containers that would fill up and had to be emptied manually, the company says. Skyline has a few competitors with similar devices, including Kalamazoo, MI-based Stryker and a subsidiary of Warsaw, IN-based Zimmer-Biomet. Skyline argues that its device takes up less room and its design allows the fluids to be disposed of more easily.