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GEN News Highlights : Mar 1, 2013
Wright Closes Up-To-$380M BioMimetic Purchase
Wright Medical Group said today it closed on its up-to-$380 million acquisition of BioMimetic Therapeutics, a deal that adds BioMimetic’s biologics platform with Wright’s biologics, as well as devices and sales force, for extremity, hip, and knee reconstruction.
Wright is acquiring BioMimetic for about $190 million cash and stock up-front, plus up to $190 million in additional payments tied to receiving FDA approval of Augment® Bone Graft and achieving undisclosed revenue milestones.
Augment is a bone graft product based on recombinant human platelet-derived growth factor and designed as a replacement for autologous bone graft in hindfoot and ankle fusions, reinforcing surgical bone repair. In June 2012, BioMimetic submitted to FDA a responsive PMA amendment responding to the agency’s request for additional information about the product.
FDA’s decision is expected between April and January 2014. If approved, Augment would be the first clinically proven protein therapeutic to come to the orthopedics market in a decade—and capitalize on a market that Wright has estimated at about $300 million annually in the U.S. alone. Augment Bone Graft is currently available for sale as an alternative to autograft in Canada for foot and ankle fusion indications, and in Australia and New Zealand for hindfoot and ankle fusion indications.
The up-front cash includes about $42.5 million Wright said it will pay in conjunction with closing the transaction. The company also will issue about 7 million shares of its common stock as well as 28.1 million contingent value rights.
The CVRs will be listed for trading on the Nasdaq Global Market under the symbol WMGIZ and are expected to begin trading on Monday. BioMimetic shareholders will receive CVR payments of $3.50 per share upon FDA approval of Augment Bone Graft; $1.50 per share upon the achievement of $40 million in trailing twelve month sales for all products contributed by BioMimetic; and $1.50 per share upon the achievement of $70 million in the preceding twelve month sales for all products contributed by BioMimetic. The latter two sales milestone payments cannot be made sooner than 24 and 36 months post-closing of the transaction, respectively.
Wright said it expects no change to its projected full-year 2013 net sales range of $485 million to $495 million, but does foresee a 32-cent to 34-cent dip in earnings per share, resulting in an anticipated full-year 2013 loss per share, including stock-based compensation for the combined company, of 26 to 34 cents per share.
BioMimetic had focused on developing regenerative medicine products to promote the healing of musculoskeletal injuries and diseases with a novel protein therapeutic product. BioMimetic’s common stock ceased trading on the Nasdaq Global Market as of today.
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