When Mallinckrodt Pharmaceuticals bought Stratatech Corp., of Madison, last August, it paid $76 million in cash for the regenerative skin tissue company, according to documents filed with federal regulators.

And there may be additional payments yet to come. The British drug company could pay up to $121 million more if certain milestones are met and royalties collected, Mallinckrodt said in the filing. That would bring the total price tag to a potential $197 million.

When the acquisition was announced, terms were not disclosed.

Stratatech’s lead product is StrataGraft, skin tissue developed from human skin cells. Clinical tests have shown StrataGraft has healed the wounds of patients with serious burns without requiring grafts of the patients’ own skin, which can be a painful process.

Mallinckrodt estimated the value of the research and development of StrataGraft at $99.8 million, and pegged the value of all of Stratatech’s assets at $160.5 million. That includes $57.3 million in goodwill, “which represents future product development, the assembled workforce, and the tax status of the transaction,” Mallinckrodt said in its annual report, filed in late 2016.

Stratatech’s liabilities were calculated at $84.5 million, all but about $5 million of that in deferred taxes and in “contingent consideration,” which represents the “fair value of the $121 million in potential future payments,” Mallinckrodt spokeswoman Rhonda Sciarra said in an email exchange.

Tom Still, president of the Wisconsin Technology Council, said the total potential purchase price of $197 million is somewhere in the mid-range of other Madison-area biotech acquisitions in recent years.

For example, drug giant Roche bought gene chip company NimbleGen for $272.5 million in 2007 and bought Mirus Bio, with RNA interference technology, for $125 million in 2008. Hologic bought biological screening tools company Third Wave Technologies for $580 million in 2008 while Kensey Nash bought surgical adhesives company Nerites for $20 million in 2011.

“Based on previous acquisitions in that general space, it would seem the Stratatech acquisition is in the ballpark if milestone payments and royalty payments are achieved,” Still said.

Since Mallinckrodt bought the company founded in 2000, Stratatech has moved into bigger space in University Research Park and has started pilot manufacturing of StrataGraft there, Sciarra said. As clinical development progresses, “we will explore a future expansion of this facility,” she added.

Up to now, the tissue had been produced at the Waisman Biomanufacturing facility at UW-Madison, Stratatech CEO and founder Lynn Allen-Hoffmann said in an interview last September.

Nearly all of the 55 employees stayed with the company; Allen-Hoffmann is senior vice president of regenerative medicine, Sciarra said.

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