The Japanese Ministry of Health recommended the bead be made available as early as possible at a meeting last January.

Biocompatibles chief executive Crispin Simon said: "We congratulate Eisai on submission of the DC bead Marketing Authorisation. 

“The designation of DC Bead for fast track registration in Japan recognises the benefits this product brings over conventional therapies, and the size of the Japanese HCC patient population."

Last month Biocompatibles accepted a bid from drug developer BTG (LON:BGC), which values the company at 430p a share, or £177.2 million in total.

Biocompatibles recommended the offer because it said it believed the deal will create a “fast-growing, financially stronger, international specialist healthcare business”.

The pair said the transaction is about harnessing the growth potential of Biocompatibles, whose drug delivery beads are used in oncology.

They will have cash resources of around £97 million to tap into and a number of other innovations to take into the marketplace.

Investors are being offered 1.6733 BTG shares for each Biocompatibles share they own plus 10p in cash. 

Alternatively they can pass on the 10p cash payment and opt instead for contingent value notes up to the value of 47p (56 euros), which are linked to the development of GLP-1 for diabetes and obesity. 

Shareholders accounting for 53.19 per cent of Biocompatibles stock have irrevocably committed to backing the deal, while a further 10.49 per cent have said they intend to back the offer.

The acquisition is being done via a scheme of arrangement, which requires 75 per cent support from investors.

However they all agree there is a definite logic to bringing together the specialist pharmaceuticals projects and pipeline of BTG with the innovative bead technology of Biocompatibles, which is currently being used in cancer but has a number of other alternative applications.

BII also has several new products that will benefit from the increased financial firepower of the enlarged company. This includes a potentially blockbuster drug in GLP-1 for diabetes and obesity.

“Supported by an even stronger balance sheet and a further expanded set of revenue generating products, the enlarged group’s diversified portfolio of in-house and partnered programmes will further reduce the risk that the business will be adversely affected by an unexpected product failure,” said Daniel Stewart analyst Vadim Alexandre. 

“We believe that this level of portfolio risk diversification is unrivalled by BTG’s midcap UK-listed peers.”

The nuts and bolts of the deal are as follows. BTG is paying 430p a share, or £177.2 million in total for BII.

This represents a more than 60 per cent premium to the share price just prior to the announcement of takeover talks back in September.

Biocompatibles said it is recommending the offer because it believes the deal will create a “fast-growing, financially stronger, international specialist healthcare business”.

The deal will be earnings enhancing from year one and create synergies of around £3 million.

The pair will have cash resources of around £97 million to tap into and a number of other innovations to take into the marketplace.

“In particular, the BTG directors intend to undertake registration trials in respect of Biocompatibles' embolising beads and drug-eluting beads to increase the products' approved indications and the territories in which they can be marketed,” BTG said in a stock exchange statement.

Investors are being offered 1.6733 BTG shares for each Biocompatibles share they own plus 10p in cash. 

Alternatively they can pass on the 10p cash payment and opt instead for contingent value notes up to the value of 47p (56 euros), which are linked to the development of GLP-1 for diabetes and obesity. 

Shareholders accounting for 53.19 per cent of Biocompatibles stock have irrevocably committed to backing the deal, while a further 10.49 per cent have said they intend to back the offer.

The acquisition is being done via a scheme of arrangement, which requires 75 per cent backing from investors.

City broker Evolution reckons the acquisition looks a “quite expensive” based on a multiple of five times projected sales or 43 times EPS.

“However the deal leverages BTG’s newly vertically integrated specialty pharma capability,” said analyst Simon Conway said in a note to clients. 

“And in line with their announced strategy, provides them with US marketed products and sales force in the interventional oncology space amongst other things and will complement BTG’s existing presence in acute care sector with CroFab etc. 

“Thus while we think the market will take time to digest the deal and price, it helps to cement their position as an emerging force in specialty pharma space.”

Peel Hunt analyst Paul Cuddon was quick to see the basic financial merits of the takeover, pointing out that it brings in £36 million of revenues and £33 million of cash as well as a profitable underlying business.

It also offers BTG a channel into interventional radiologists in the US. Cuddon has a “blue-sky” price target of 600p on a “three-year view”.

“Although we have yet to fully value to Biocompatibles pipeline, the potential synergies, increased critical mass in the US and the diabetes program partnered with AstraZeneca is likely to see our valuation rise with scope to outperform,” the analyst concludes.

BII shares rose 59p, or 19 per cent to 376p, while BTG fell 27.8p to 223.2p.

The price being paid is a near 60 per cent premium to the share price just prior to the announcement of takeover talks back in September.

Biocompatibles  said it is recommending the offer because it believes the deal will create a “fast-growing, financially stronger, international specialist healthcare business”.

The deal will be earnings enhancing from year one and create synergies of around £3 million.

However the transaction is more about harnessing the growth potential of Biocompatibles, whose drug delivery beads are used in oncology.

The pair will have cash resources of around £97 million to tap into and a number of other innovations to take into the marketplace.

“In particular, the BTG directors intend to undertake registration trials in respect of Biocompatibles' embolising beads and drug-eluting beads to increase the products' approved indications and the territories in which they can be marketed,” BTG said in a stock exchange statement.

Investors are being offered 1.6733 BTG shares for each Biocompatibles share they own plus 10p in cash. 

Alternatively they can pass on the 10p cash payment and opt instead for contingent value notes up to the value of 47p (56 euros), which are linked to the development of GLP-1 for diabetes and obesity. 

Shareholders accounting for 53.19 per cent of Biocompatibles stock have irrevocably committed to backing the deal, while a further 10.49 per cent have said they intend to back the offer.

The acquisition is being done via a scheme of arrangement, which requires 75 per cent support from investors.

Details were not disclosed. A further update to shareholders will be made in due course.

The drug-device combination products specialist said in a separate trading statement that sales remain in line with management's expectations and it continues to expect full year revenue in the range of £31 million to £34 million.

In its interim management statement relating to the period from July 1 to October 27 2010, it said the company's cash balance decreased by £0.7m during the three months to September 30, closing with £32.7 million.

Biocompatibles expects to exceed the year-end guidance for closing cash of £26 million.

Commenting on the third quarter of 2010, chief executive Crispin Simon said: "The company continues to make good progress and we look forward to achieving our 2010 annual goals."

Details were not disclosed. A further update to shareholders will be made in due course.

The drug-device combination products specialist said in a separate trading statement that sales remain in line with management's expectations and it continues to expect full year revenue in the range of £31 million to £34 million.

In its interim management statement relating to the period from July 1 to October 27 2010, it said the company's cash balance decreased by £0.7m during the three months to September 30, closing with £32.7 million.

Biocompatibles expects to exceed the year-end guidance for closing cash of £26 million.

Commenting on the third quarter of 2010, chief executive Crispin Simon said: "The company continues to make good progress and we look forward to achieving our 2010 annual goals."

The product, developed by BII, was withdrawn in June when a small number of patients reported an adverse reaction to the treatment.

Merz has made strides in developing a reversing agent and remains committed to re-introducing Novabel.

However it can’t say when this will happen.

As a result Biocompatibles is budgeting for zero production of Novabel in 2011. 

The medical technology group’s business plan had included sales to Merz of around £3m in 2011.

The company said it will review the carrying value of the assets supporting the Novabel programme at the end of the current financial year. 

Depending on Merz's plans and timescales, an impairment of these assets may be required, which would impact net profits, Biocompatibles said.

"We believe, and so do Merz, that Novabel will again become a popular and valuable product," added chief executive Crispin Simon.

“We are delighted with the progress of our programme with AstraZeneca and look forward to the completion of the patient studies,” said Biocompatibles chief executive Crispin Simon.

Biocompatibles entered into an agreement with AstraZeneca to develop CM3 in December 2008. The agreement included pre-clinical, Phase I and Phase IIa activities managed by Biocompatibles subsidiary CellMed.

Under the terms of the agreement, AstraZeneca has an exclusive option to license relevant patents for further exploitation at any time during the development programme.

On the exercise of the option to license, AstraZeneca would pay a license fee of €25 million and assume the financial and management responsibility for the programme.

Further milestones of €37.5 million would be payable prior to first sale of product.

Earlier this week, Biocompatibles confirmed that it has received a preliminary approach, which may or may not lead to an offer for the company.

The Surrey-based medical technology company develops drug delivery products, mainly in the field of oncology. Biocompatibles’ Oncology Products Division supplies drug-eluting bead products via distribution partners such as AngioDynamics, Terumo and Eisai.

In August, Biocompatibles announced impressive interim results, which revealed a 22% jump in total revenue, or 24% at constant currency to £17 million as Bead products revenues increased 38% to £9.3 million. Most importantly, the company made a profit of £1.2 million after posting a £0.7 million loss in H1 2009.

Based on the company’s growth potential, and peer analysis, investment banking firm Piper Jaffray estimated Biocompatibles enterprise value at £134.6 million, which it said equated to a market cap of £160.5 million, or 410 pence a share.

Total revenues jumped 22%, or 24% at constant currency to £17 million as Bead products revenues increased 38% to £9.3 million. Most importantly, the company made a profit of £1.2 million after posting a £0.7 million loss in H1 2009.

Overall, the company was pleased with the results, particularly the strong revenue growth, and expected to continue trading profitably.

“We are pleased to have moved into profit and intend to remain there whilst maintaining our commitment to developing and growing innovative medical therapies,” said Chief Executive of Biocompatibles International Crispin Simon.

Biocompatibles simultaneously announced the presentation of Phase I/II data in a clinical trial evaluating DEBIRI (Drug-Eluting Beads loaded with irinotecan) in liver metastases from colo-rectal cancer and FDA approval for continuing the clinical trial into a randomised Phase IIb.

The data was presented at the World Congress for Gastro-Intestinal Cancer in Barcelona in July for ten patients with unresectable liver metastases who had received no prior treatment and who had been treated with the combination of the FOLFOX chemotherapy regimen and DEBIRI.

Five of the ten patients were down-staged to a potentially curative surgical treatment.

Associate Professor of Surgery in the Division of Surgical Oncology at the University of Louisville Robert martin, who was presenting the data, described the treatment regime as “safe and effective with superior surgical downstaging”.

With the FDA approval secured, 60 patients will now be randomised for treatment with the FOLFOX or FOLFOX and DEBIRI.

Biocompatibles noted that while FOLFOX was a standard of care that has been shown to extend survival, the liver metastases still progressed with systemic chemotherapy unless surgically removed.

The primary end-point is tumour response with secondary end-points including safety, progression free survival and overall survival. Results are expected in 2012.

“And while FOLFOX is a systemic treatment, DEBIRI is a catheter-targeted local treatment - so there is a good rationale to explain the increase in the number of patients in this trial who were down-staged to resection and a potential cure. These are very promising results. And following the NICE rejection of Avastin this week, patients do now have another option to discuss with their doctor,” said Simon.

DEBIRI with DC Bead has been approved for use in the UK and 30 other countries.

The strong interim results released by the medical technology company in late August prompted broker Edison Investment Research in mid-September to retain its bullish stance on the stock, maintaining a target price at 390 pence per share. Biocompatibles increased sales by 54% in the first half, beating expectations as oncology-related products sales hiked to £10.1 million, while the group posted a loss of £0.86 million.

The strong performance in H1 led Biocompatibles to up sales guidance for the full year to £24-26 million from £22-24 million and cash guidance to £28 million from £27 million.

The company said in August its key products had good momentum and the board expected those trends to continue into the second half and 2010.

The trial was conducted at Johns Hopkins University School of Medicine in Baltimore, Maryland, under Professor Jean-Francois Geschwind, Professor of Radiology, Surgery and Oncology.  It involved 20 patients with hepatocellular carcinoma, or HCC.

Professor Geschwind is now recruiting patients in a single arm Phase II trial evaluating the potential usefulness of sorafenib in conjunction with treatment with drug-eluting bead in 50 patients with HCC. Four patients have been treated and it is expected that preliminary data will be presented during the course of 2009. This trial is part of a clinical collaboration agreement between Biocompatibles and Bayer Pharmaceuticals Inc.

He is also recruiting patients in a 30 patient single arm trial evaluating the potential usefulness of the drug-eluting beads in patients with Neuroendocrine Metastases in the liver.

Professor Robert Martin, Associate Professor of Surgery in the Division of Surgical Oncology at the University of Louisville, has initiated a randomised trial for the evaluation of the Drug-Eluting Beads in hepatic colorectal metastases for patients who are not eligible for surgical resection (first line patients). The trial was announced mid-April 2009 and is known as PARAGON Louisville.

Professor Wells Messersmith, Associate Professor, Division of Medical Oncology, University of Colorado Cancer Center, Denver, CO, is recruiting patients with hepatic colorectal metastases who have failed one line of drug therapy (second line patients). This trial is known as PARAGON 1.

Biocpompatibles chief executive Crispin Simon said: "Our drug-eluting bead products are now routinely used in more than 35 countries; but we are maintaining our commitment to assembling definitive evidence in support of this evolution in clinical practice."