Diagnostic and therapeutic medical technology firm Laborie Medical Technologies has signed a definitive agreement and entered into a multi-faceted, strategic partnership with medical device company Urotronic.

Urotronic is currently carrying out a study to support regulatory approval of its drug-coated balloon (DCB) technology, dubbed Optilume, for use in urethral strictures and benign prostatic hyperplasia (BPH). It recently received CE Mark approval for use in urethral strictures.

The company said it developed it Optilume paclitaxel-coated balloon technology in response to patient and physician dissatisfaction with existing solutions for urethral strictures and BPH.

As part of the agreement, LABORIE will make a $15m investment in Urotronic’s Series C financing round along with $5m from its current shareholders.

In conjunction with the investment, the company will obtain an option to purchase all rights to Optilume for $165m.

Under the agreement, LABORIE can acquire a perpetual, exclusive licence to the Optilume Urethral Strictures device, subject to FDA approval.

LABORIE also has an option to acquire the Urotronic, upon FDA approval of the Optilume BPH device, for an upfront payment of $350m plus another $150m in earnouts if certain sales milestones are reached.

LABORIE president and CEO Michael Frazzette said: “Optilume is a disruptive, minimally invasive technology that has the potential to change the standard of care for urethral strictures and for BPH.

“This innovative technology meets multiple unmet medical needs in the market, expands LABORIE’s current urology offering, and aligns well with our desire to help clinicians improve their patients’ lives.”

Urotronic president and CEO David Perry said: “We are excited to have LABORIE invest in our company and become a global distribution partner to commercialise our disruptive technologies.

“The investment by LABORIE, a leader in urology care globally, strengthens Optilume’s position as a cutting-edge product in the urology device market.”

In February, Laborie Medical Technologies closed the acquisition of Clinical Innovations for an enterprise value of $525m.