Medtronic And Tissuemed’s Amicable Separation

In short

With effect from 1st June 2012, Tissuemed Ltd. and Medtronic Inc. have agreed that the medtech giant’s European distribution of Tissuemed’s dural sealant film will revert back to Tissuemed. In a statement on its website, which can be found here, Tissuemed states this is a commercial decision to enable it to actively control commercialisation of its core sealant product.

Background

Medtronic and Tissuemed struck a deal in 2010 which saw Tissuemed’s Neuro/Spinal dural sealant film rebranded as Obex Neurofilm and distributed exclusively in most European (and some other outsides US) territories, by Medtronic.

After an almost two year collaboration the two companies have agreed that it’s in the interest of both parties for the distribution deal to cease, which will mean Tissuemed reigniting its own distribution efforts.

Medtronic’s Obex NeuroFilm and Tissuemed’s TissuePatchDural are effectively identical products in their composition, mode of action and clinical use, which means the Leeds-based entity now has the job of transitioning customers back to its own product. Indeed in its statement Tissuemed says it will be contacting Obex NeuroFilm customers to provide advice regarding their local distributor who will manage sales and customer support activities relating to TissuePatchDural.

Medtronic will retain its 17% stake in Tissuemed and under the terms of the separation has agreed to pay the company a compensatory sum.

Company comments

Tissuemed’s CEO David Mandley stated; “I think our commercial relationship with Medtronic has taught us a lot, particularly about the type of partner that’s right for us. I’m very pleased that Medtronic remains a significant shareholder and our relationship is such that we could both work out quickly what was the right thing to do for the business moving forward.”

We say

So why did the companies decide to go their separate ways? It’s tough to see past the old big company/ small product explanation: Medtronic is a healthcare giant with a Neuro/Spine range comprising high value capital items. In contrast Tissuemed focuses exclusively on surgical sealant films, which may be hugely beneficial to the surgeon as an adjunct to closure by preventing suture line leakage of Cerebrospinal Fluid, but which comprise a relatively small piece of the action as far as the representative of a major commercial player like Medtronic is concerned.

Of course this was known at the time the original deal was struck, but it’s easy to look past the potential for underexposure when one of the world’s biggest and most respected device players comes along looking serious. It all goes to show that when you’re trying to get your new technology embraced and adopted by the market, the newer (or more disruptive) it is, the more you need to do it yourself.

Source: Tissuemed Ltd.