Orthovita Contracts for Cash and Hemostat from AngioTech
BY ROBIN R. YOUNG CFA, JUNE 28, 2004
Cash and hemostats stop two kinds of bleeding. Last week, Orthovita (VITA) added both in an important and impressive deal with AngioTech. This deal will bring a new product to its growing arsenal of biomaterials, as well as a whopping $25 million in new equity. How much of itself did it sell to AngioTech? We will likely know in the coming weeks. To put the new equity in perspective, VITA's shareholders' equity stood at $19 million as of the end of the most recent quarter (March/2004).
The product AngioTech is licensing to Orthovita is a collagen and thrombin gel which, when combined with a concentrated bone marrow creates a powerful hemostat (stops bleeding) and healing compound. Collagen and thrombin compounds have been around for a while in several forms, most famously FloSeal® from Baxter. These materials are very effective at stopping active bleeding quickly; an obvious boon to the surgeon. And they are cheap. FloSeal® costs around $150 per unit. Orthovita's new product, VITAGel, will be priced competitively. Market roll out is expected later this year.
Such hemostats as this are basic, essential tools for surgeons in surgery. Bleeding, both inter-op and post-op, is a leading complication from surgery, along with adhesions. Having this in their bag is a solid step forward in Orthovita's plan to build and support an industry leading sales and distribution network.
