Orthopedic News Roundup 7-June-07
BY LAUREN UZDIENSKI, JUNE 7, 2007
M&A
The private equity consortium set to acquire Biomet increased its buyout offer to $46.00 per share in cash, or an equity value of $11.4 billion. The new offer represents a 32.3% premium over the April 2006 common stock closing price that preceded speculation of a buyout. Additionally, Biomet reached an agreement to settle class-action lawsuits filed on behalf of company shareholders. The lawsuits alleged that Biomet's board members breached or aided and abetted the breach of fiduciary duties owed to shareholders related to the upcoming private equity acquisition. Biomet agreed to settle the cases to avoid a possible delay in the acquisition, and as a condition, the company will make available additional information, including financial information, to its shareholders.
Stryker announced the completed sale of Physiotherapy Associates Inc. to Water Street Healthcare Partners. According to the press release, the Chicago-based private equity firm bought Physiotherapy Associates for about $150.0 million in cash and committed additional equity capital. Physiotherapy Associates has 475 clinics in 31 states and provides general orthopedic and spinal care and neurological rehabilitation.
Henry Schein Inc. agreed to acquire Becker-Parkin Dental Supply Co.'s full-service and special-markets businesses. The full-service business offers consumable dental products and equipment through field sales representatives; the special-markets business serves corporate dental customers. Henry Schein estimates the two businesses to contribute about $40 million to $45 million in revenue in the first full year after the merger and slightly add to 2008 earnings.
Kensey Nash Corp. purchased the assets of Cytori Therapeutics' MacroPore Biosurgery unit for $3.2 million. Assets include Cytori's Hydrosorb surgical implant product line, which will continue to be distributed by Medtronic Inc., among additional manufacturing equipment, intellectual property and inventory.
Smith & Nephew closed their $889.0 million purchase of Plus Orthopedics, a sale that SNN says makes them the fourth-largest orthopedics company in the world. The company also plans to keep growing; CEO Christopher O'Donnell stated that the the company has identified 30 to 40 potential targets.
Pioneer Surgical Technology announced its acquisition of Encelle, Inc. Encelle develops tissue regeneration products including E-Matrix™, a sterile, injectable biopolymer designed to repair or regenerate diseased or damaged tissue. Terms were not disclosed. Encelle will continue operations in its Greenville facility and be renamed Pioneer Surgical Orthobiologics.
Funding
Tepha, Inc. closed a $10.7 million financing led by The Vertical Group. Also participating in the financing were Integra Ventures, Novartis Venture Fund and Westfield Life Sciences Fund. The funds will be used to support the development of Tepha's biopolymer technology platform, which includes materials processing, device testing and regulatory submissions.
BioSET announced the completion of an $11.0 million equity financing led by Austin-based PTV Sciences and joined by new investors Westfield Capital and Heron Capital. Existing investors participating in the funding include the Vertical Group, EDF Ventures, MB Ventures and New Markets Growth Fund. The funds be used on clinical trials for the company's synthetic B2A growth factor product for spinal fusion as well as further pre-clinical development of additional growth factor mimetics.
SpineMatrix Inc. closed an $8.0 million round of financing led by Psilos Group, a New York City private equity firm. The round includes a $900,000 loan from the Ohio Department of Development and funds from investors within the company. The capital will be used to manufacture and sell the company's technology for diagnosing back pain, called the Computerized Electrophysiological Reconstruction of Spinal Regions.
Osiris Therapeutics, Inc. agreed to sell 1,757,469 shares, or $20.0 million, of its common stock at $11.38 per share. The common stock will be sold directly to institutional and accredited investors primarily based in Switzerland. The placement was led by Peter Friedli, the Chairman of the Board of Directors and largest stockholder of Osiris Therapeutics. Funds will be used to further develop the company's adult stem cell products, currently in Phase III clinical trials.
Regulatory
Vertebration received 510(k) clearance for its XYcor™ Spinal Implant. The press release calls the implant "specifically designed for low profile, minimally invasive implantation and compatible with all current MIS/MAST access systems."
Artimplant received FDA approval for the company's Artelon® CMC Spacer Arthro. The product is indicated for thumb base osteoarthritis and will be marketed by Small Bone Innovations as Artelon® CMC Spacer.
Legal
Arthrocare announced that an investigation into their stock-option practices has been closed. In a regulatory filing, Arthrocare said that the SEC does not intend to recommend any enforcement action against the company. Alongside a number of other companies, Arthrocare was under investigation on suspicion of manipulating the date recorded for stock-option grants.
License Agreements
Arthro Kinetics signed a Development and License Agreement with Tokyo-based Polaris Rx Corporation for the commercialization of CaReS® in Japan. Polaris will produce CaReS using Arthro Kinetics' proprietary 3-dimensional collagen matrix and will be responsible for commercializing CaReS in Japan.
Regeneration Technologies announced an agreement with Stryker whereby RTI will provide cervical spinal allograft implants based on Stryker's designs. The agreement is effective immediately.
Appointment
Alphatec Holdings, Inc. announced that veteran orthopedic industry executive Dirk Kuyper will join the company as its President and Chief Executive Officer. Mr. Kuyper will also join Alphatec's Board of Directors. With this addition to Alphatec's executive team, John H. Foster has agreed to resign as the company's President and Chief Executive Officer on the date Mr. Kuyper joins the company. Mr. Foster will remain as the Chairman of the Board of Directors.
Miscellaneous
Two Biomet executives have announced their retirement: Charles E. Niemier and Garry L. England, have informed Biomet of their decisions to retire. Mr. Niemier will retire from his position as Senior Vice President, Biomet, Inc. and Senior Vice President, Biomet International and Corporate Relations, effective June 18. He will remain on Biomet's Board of Directors. Mr. England retired effective May 31, 2007, from his position as Biomet's Chief Operating Officer, Domestic Operations. Mr. Niemier and Mr. England have been at Biomet 27 and 26 years, respectively.
