Galmed Pharmaceuticals announced on Monday that it has entered into a definitive acquisition agreement with the Israeli medical device company Colospan. Under the terms, Galmed will acquire all of Colospan's issued shares for $2.5 million in cash and $2.0 million worth of its common stock, bringing the total transaction value to approximately $4.5 million. Upon closing, Colospan will become a wholly-owned subsidiary of Galmed.



Colospan is a commercial-stage medical device company focused on reducing complications in colorectal surgery. Its flagship product, the CG-100 Intraluminal Bypass Device, is designed to provide a minimally invasive alternative to diverting stomas in colorectal resection surgeries. The device has received Breakthrough Device designation from the U.S. FDA and is CE Mark certified under the European Union Medical Device Regulation, positioning it for commercial launch in the EU and Israel.



Colorectal cancer ranks as the third most common cancer globally, with approximately 1.9 million new cases diagnosed each year. Data shows that anastomotic leak occurs in up to 21% of colorectal resection surgeries, increasing patient mortality, hospital stays, and healthcare costs. While the traditional diverting stoma used to prevent this complication is the clinical standard, it significantly impacts patients' quality of life and imposes a burden on healthcare systems.



Galmed plans to invest $6 million to launch the CG-100 device in Europe in the second half of 2026, initially focusing on the German, Austrian, and Swiss markets. In the United States, the device is currently limited to clinical trials under an Investigational Device Exemption, and Colospan is conducting a pivotal clinical trial to support a future FDA marketing application.



Galmed CEO Allen Baharaff stated that this acquisition combines the company's over 25 years of clinical execution capabilities with Colospan's innovative device technology, with the potential to reshape treatment standards for colorectal resection patients worldwide. Colospan founder Boaz Assaf noted that the company is committed to creating a future for patients without the need for stomas.



However, Colospan's audited financial statements show the company has consistently generated operating losses and has negative shareholders' equity, raising substantial doubt about its ability to continue as a going concern. Galmed intends to stabilize its financial condition through capital deployment and integration efforts.



Following this news, Galmed's stock price fell approximately 13% on the day, giving the company a market capitalization of around $4.6 million. The transaction has received unanimous approval from the boards of both companies and is expected to close in the second quarter of 2026.