Wright Medical And BioMimetic Tie The Knot

In short

Wright Medical Group, Inc.  and BioMimetic Therapeutics, Inc. announced today that they have entered into a definitive agreement to merge their businesses. The transaction, worth a reported $380M to BioMimetic shareholders, will combine BioMimetic’s breakthrough biologics platform and pipeline with Wright’s established sales force and product portfolio, which Wright expects will further accelerate growth opportunities in its Extremities business.

Background

Wright is an orthopedics company with a market-leading lower extremities franchise. BioMimetic is focused on developing regenerative medicine products to promote the healing of musculoskeletal injuries and diseases with a novel protein therapeutic product, Augment® Bone Graft, under late stage FDA review as a replacement for autologous bone graft in foot and ankle fusions.

Augment® is based on recombinant human platelet-derived growth factor (rhPDGF-BB), a synthetic copy of one of the body’s principal healing agents. The product 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 company is progressing a U.S. PMA for the device which, if approved, will be the first clinically proven protein therapeutic to come to the orthopedics market in a decade. This would open up an estimated $300M U.S. market opportunity in the reinforcement of  surgical bone repair in hindfoot and ankle fusion procedures.

Under the terms of the agreement, the transaction has a total potential value for BioMimetic shareholders of approximately $380 million, or $12.97 per share, based on Wright’s closing stock price on Friday, November 16, 2012.
Each share of BioMimetic common stock will be converted into the right to receive an upfront payment of $1.50 in cash and 0.2482 shares of Wright common stock. So, working it all out, the upfront payment values BioMimetic at approximately $190 million, or $6.47 per share, based on Wright’s closing stock price on November 16, 2012. Each BioMimetic share will also receive one tradable Contingent Value Right (CVR), which entitles its holder to receive additional cash payments of up to $6.50 per share, which are payable upon receipt of FDA approval of Augment® Bone Graft and upon achieving certain revenue milestones.

The transaction is expected to close in the first quarter of 2013 and is subject to customary closing conditions, including BioMimetic shareholder approval.

Company comments

for Wright Medical

Robert Palmisano, President and Chief Executive Officer of Wright, commented, “We believe this transaction will significantly accelerate the continued transformation of our business as well as our strategy of building a world-class biologics platform and growing our foot and ankle business at well above market growth rates. BioMimetic’s products complement our existing biologics product portfolio, and, if approved by the FDA as we expect, Augment® Bone Graft will provide us with a unique solution for the U.S. hindfoot and ankle fusion market that leverages the distribution capabilities of Wright’s dedicated foot and ankle sales organization and our physician training capabilities.”

for BioMimetic

Dr. Samuel Lynch, President and Chief Executive Officer of BioMimetic Therapeutics, added, “BioMimetic is delighted to partner with a company that shares our commitment to building a world-class biologics platform. We believe that Augment® Bone Graft will become an important new therapeutics option to improve patient outcomes in hindfoot and ankle fusion procedures, and that Wright Medical with its leadership position in the foot and ankle market is the ideal partner to accelerate the rapid adoption of our products around the world.”

Source: Wright Medical Group, Inc., BioMimetic Therapeutics, Inc., Business Wire