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Wright Medical sells off hip and knee assets to Corin for $33M
Wright Medical deals large joint biz to Corin Orthopaedics for $33m (MassDevice)
Wright Medical (NSDQ:WMGI) said today that it agreed to deal its large joints business to Corin Orthopaedics Holdings for about $33 million in cash.
The €29.7 million transaction, which is expected to close by the end of the 3rd quarter or early in the 4th quarter, involves legacy hip and knee implants from Tornier; Wright and Tornier merged in a $3.3 billion deal in October 2015.
Wright itself got out of the hip and knee space in June 2013 with the $290 million sale of its OrthoRecon business to Hong Kong-based MicroPort Scientific (HK:0853).
The assets included in the sale to Corin, which are mostly sold in Europe, are the Dynacup and Meije Duo hip implants and HLS KneeTec and HLS Noetos knee implants. After a transition period they’ll be re-branded under the Corin banner; the business will keep its base in Montbonnot, France, Wright said.
Net proceeds from the sale are expected to be about $20 million, according to Wright, which said it had projected $37 million in sales for the business this year. Adjusted earnings before interest, taxes, debt and amortization were pegged at $5 million to $6 million; the loss of the revenue stream prompted Wright to cut its sales outlook from between $705 million and $715 million to between $668 million and $678 million.
The company stood pat on its EBITDA forecast, however, saying it still expects them to be $30 million to $35 million.
“Our large joints business has excellent products and significant market share in key European markets with a loyal customer base. However, this business is not in line with our strategy to be the premier extremities and biologics company. The sale of this business to a strong business partner that is focused on the hip and knee market is the logical next strategic step for Wright. Once completed, this should enable both businesses to flourish as separate companies focused in their unique market spaces with strong management teams that will position them for continued success. In addition, post-closing, we will be able to devote our full resources and attention on accelerating growth opportunities in the high-growth extremities and biologics markets and believe this will enhance our ability to create significant shareholder value,” Wright president & CEO Robert Palmisano said in prepared remarks. “We are pleased we have found an excellent strategic buyer in Corin, a company that is deeply committed to the success of the hip and knee business and will continue to provide the focus and investment to enable it to reach its full potential. Also, very importantly, this will provide our employees with enhanced opportunities for career growth and development. We are grateful to our large joint employees for their dedication and hard work.”
“We are delighted with the acquisition of Tornier’s clinically proven portfolio of hips and knees. Tornier’s hip and knee portfolio has been a key part of the history of orthopedics and has always been a significant driver of improving the clinical outcome for patients across the globe. Corin is focused on hip and knee joint replacement and is excited to become a major part of the innovative French clinical community. We are looking forward to working closely with Tornier’s thought leaders and surgeons and to welcoming their talented large joints team based in Montbonnot into our global organization. We trust we will be worthy custodians of Tornier’s large joints portfolio,”added Corin CEO Stefano Alfonsi.
WMGI shares ticked down -0.2% to $19.76 today in early trading.
Merit Medical acquires DFine for $98M (3 X sales)
Merit Medical pays $98m for DFine’s spine devices (MassDevice)
DFine website
All Mergers & Acquisitions in Orthopedics/Spine
Merit Medical (NSDQ:MMSI) said today that it paid $97.5 million in cash to acquire DFine and created a new division to incorporate DFine’s spine devices.
San Jose, Calif.-based DFine makes the StabiliT line of devices, for injecting bone cement into vertebral fractures, and the Star spine tumor ablation system. Jordan, Utah-based Merit said its new interventional oncology & spine division will unite those products with its own line of oncology devices, including embolics, microcatheters and biopsy products.
DFine put up $33.4 million in sales last year, ¾ of that coming from the U.S. Both of its devices have 510(K) clearance in the U.S. and CE Mark approval in the European Union, Merit said.
Some of the nearly $98 million purchase price will be used to pay off about $28 million in DFine debt and to cover deal expenses, according to a regulatory filing; another $9.75 million went into an 18-month escrow account against indemnification claims for Merit, with a further $5 million put into a 9-month escrow account to cover Merit’s costs if the integration expenses are greater than expected.
“We are delighted to have Dfine join Merit,” chairman & CEO Fred Lampropoulos said in prepared remarks. “Our relationship began a few years ago when Merit was asked to provide key device components for DFine’s StabiliT and StabiliT MX products. In addition to the spinal compression fracture segment, we believe DFINE’s Star tumor ablation kit complements and enhances Merit’s oncology business.”
“We believe the restructuring of the sales divisions – cardiovascular, peripheral and IOS – will enable us to devote greater focus on Merit’s broad portfolio of products, align our sales and marketing efforts with Merit’s goal of achieving a more therapeutic and disease state centered product offering, and enhance opportunities for future growth,” Lampropoulos added. “Although DFine has a presence in Germany and Austria, as well as limited distribution partners, we believe there are many opportunities in Australia, Canada, Japan, China, the Nordic countries and other regions. We anticipate that DFine’s IP portfolio of approximately 110 U.S. and international patents will provide substantial coverage for many years ahead.”
Merit said it expects the deal to be neutral to adjusted earnings per share this year but add 5¢ to 8¢ next year. Reported EPS are slated to take a -24¢ to -26¢ hit this year on amortization and restructuring costs; that narrows to -5¢ to -7¢ per share in 2017, the company said.
Canaccord Genuity advised Merit on the deal, with Piper Jaffray advising DFine.
Cartiva is the first PMA approved alternative to fusion for arthritis of the big toe joint
FDA Approves Cartiva Synthetic Cartilage Implant (ODTMag)
Cartiva is the first PMA approved alternative to fusion for arthritis of the big toe joint.
Cartiva Inc. announced today that it received Premarket Approval (PMA) from the U.S. Food and Drug Administration (FDA) for its Cartiva Synthetic Cartilage Implant (SCI) for arthritis of the big toe joint. The approval allows the Company to begin marketing in the United States the first synthetic cartilage device approved by the FDA.
Cartiva SCI is intended for the treatment of painful arthritis at the base of the big toe, the most common arthritic condition in the foot. The current standard of care involves fusing the bones in the arthritic joint with screws and plates. While fusion is an effective procedure for eliminating pain, it permanently prevents movement of the joint.
The Cartiva SCI device, an alternative to fusion, is a biocompatible, biomedical polymer implant designed to have physical properties similar to those of articular cartilage. Damaged cartilage is replaced with a small Cartiva SCI implant that provides a cartilage-like compressible, low-friction and durable bearing surface. The implant provides pain relief and improves both function and motion.
The FDA’s decision was supported by the MOTION clinical study, a 236-patient, multi-center, prospective, randomized study comparing Cartiva SCI to fusion – the largest study ever conducted for this condition.
To read the full feature, see it at ODTmag – FDA Approves Cartiva Synthetic Cartilage Implant
New collar technology goes "beyond the helmet" in prevents sports head injuries
NECK COLLAR PREVENTS HEAD INJURIES (Orthopedics This Week)
“Go Beyond the Helmet”
The hazards to players of football and other contact sports, such as hockey, come not just from external blows to the head—partially mediated by a helmet—but from blows of less velocity that cause the brain to bounce back and forth within the skull. “Brain slosh” is what happens when the brain, which is loose in the skull, bounces around in response to a hit. A study conducted at Boston University suggests that the hundreds of minor hits experienced by players pose a greater long-term risk than do concussions.
Stephen Feller, writing for UPI, reports that players living at higher altitudes have less brain movement from a blow because of their higher cerebral blood flow, which cuts down on injuries. Researchers took a lesson from woodpeckers which have head impacts with trees 20 times greater than anything experienced by pro football players.
Woodpeckers protect their brains by wrapping their tongues around the top of their heads, which provides pressure against their vascular veins, which in turn increases blood pressure to their bird brains and prevents sloshing.
Copying the woodpeckers, researchers invented the Q-Collar, a device that puts pressure on the jugular vein to slow blood outflow following a blow to the head. The slowed outflow of blood increases the blood volume in the skull which, in turn, helps the brain fit more tightly in the skull.
The researchers conducted two tests of the device, one with hockey players and the other with football players. The goal was to find out if the device really could prevent disruption of microstructure and affect the functional performance of the brain.
Researchers recruited 15 hockey players, outfitted them with accelerometers to measure impacts and randomly assigned them to wear the collar or not. At the beginning of the season, they measured the microstructure of the player’s brains. At the end of the season they found differences between the beginning and end of the season for those players who did not wear the collar. Those who wore the collar did not show any significant differences.
When they performed the same test on a group of 42 football players the results were the same. Accelerometers tracked every hit experienced by each player and measured structure and function of each player’s brain before and after the season. The researchers found that the football players who wore the collars received similar protection from the device. The researchers published their study in the British Journal of Sports Medicine.
“The results of the studies demonstrate a potential approach to protecting the brain from changes sustained within a competitive football and hockey season, as evidenced by brain imaging,” said Greg Myer, M.D., director of sports medicine research at Cincinnati Children’s Hospital. “We still have more data analysis and investigation to do, but this device could be a real game-changer in helping athletes” he said.