PMD Device Solutions (“PMDS”) today announced it intends to enter a transfer agreement with the Trustee of Coala-Life Group AB (“Coala Life”) to purchase its US subsidiary Coala Life Inc. and intellectual property and technology portfolio. The transaction will be closed no later than April 10th, 2024.
Through the intention to acquire, PMDS’s focus on growing sales of its RespiraSense™ Acute Hospital and Hospital-at-Home products in Europe will be complemented by Coala Life’s Managed Remote Patient Monitoring (RPM) operations in the US, which represented 96% of Coala Life’s revenue. Coala Life reported 39.8 MSEK in revenue for the first 9 months of 2023, with a gross margin of 81%. The customer base included 44 US clinics and a monthly billable patient activity level of 4,400 patients.
“The synergy between the two companies will reduce PMDS’s time of entry into the US for its RepsiraSense product, accelerate our path to group profitability and bring forward our target to reach 100 MSEK in annual recurring revenue. In addition, combining the companies’ innovations will complement each other as heart failure and respiratory disease are the two largest drivers of hospital-related activity," said Myles Murray, Founder and Chief Executive Officer of PMDS.
Coala Life has suffered from severe liquidity problems. Despite the launch of a cost-reduction plan, its efforts to find a solution to the liquidity problem had yet to be successful. The collection of accounts receivable has failed, and long-term discussions about paying collaborations and capital injections have yet to yield the intended results. This resulted in an inability to pay salaries and current payables, and on March 22, 2024, the Board of Directors of Coala Life filed for bankruptcy.
“PMDS sees a feasible opportunity to cut costs and apply our lean operating model in the US operation. The aim will be to initially keep around 1,400 billable patients per month and increase this to the maximum potential over the next 6-9 months. We will prioritise resources to reliable customer accounts and accelerate RespiraSense’s US market access plan to maximise the volume of patient activity. This strategy can enable us to materially increase the total number of patients while ensuring the business maintains a lean operating model, becomes a profitable business unit of PMDS, and has a well-qualified pipeline of new customers,” said Myles Murray.
Full details of the acquisition will be published upon signing of the Transfer Agreement.