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The heavily player-populated spine market continues to be an active space for mergers and acquisitions, as companies of all sizes seek to build out their implant and technology portfolios. Four of the six publicly announced orthopedic OEM transactions we tracked in 1Q21 were spine-related.
Three of the acquisitions – NuVasive’s purchase of Simplify Medical, Implanet’s merger with Orthopaedic & Spine Development (OSD) and Neo Medical’s purchase of TriOs Medical – allow the buying company to expand their implant portfolios. SeaSpine’s acquisition of 7D Surgical moves the company firmly into the enabling technology space.
NuVasive Acquires Simplify Medical
NuVasive Simplify Disc
NuVasive acquired Simplify Medical and its Simplify Cervical Artificial Disc for $150 million in cash, along with future milestones related to regulatory approval and sales.
Simplify Disc is designed for MRI compatibility, physiologic motion and anatomical height-matching. The disc was granted premarket approval from FDA for 1-level cervical indications in late 2020 and two-level cervical total disc replacement in April. It is one of three devices approved for use in two-level cervical total disc replacement, including Medtronic’s Prestige LP and Zimmer Biomet’s Mobi-C.
“The acquisition of Simplify Medical advances our previously communicated long-term growth strategy by both expanding, and further distinguishing, our portfolio with industry-leading innovation,” said NuVasive CEO Chris Barry. “Combining the Simplify Disc with NuVasive’s C360 portfolio will enable us to provide surgeons with world-class cervical technology, regardless of their preferred procedural approach.”
NuVasive estimates cervical spine market revenue at $2.6 billion. While it doesn’t expect revenue from Simplify until 2022, NuVasive leadership noted that the artificial disc has a revenue upside of $250 million to $300 million.
SeaSpine Acquires 7D Surgical
SeaSpine agreed to acquire all issued and outstanding shares of 7D Surgical. The transaction, valued at $110 million, is expected to close in 2Q21.
The companies partnered in a strategic alliance in February 2020 to distribute 7D Surgical’s navigation system founded upon its machine-vision, image-guided platform. The system reduces radiation by eliminating intra-operative CT and fluoroscopy, with the patient registration process taking 30 seconds compared to 30 minutes with traditional systems.
According to analysts, 7D Surgical had 54 systems placed and contractual sales of over $19 million as of March. SeaSpine expects to place units in 2021.
SeaSpine leadership said that COVID slowdowns allowed the two companies to more closely collaborate in their co-marketing agreement. The acquisition further enhances SeaSpine’s ability to provide a complete, integrated and seamless procedural solution and allows them to better compete with medium and large spine companies with enabling technology platforms.
Implanet Acquires Stake in OSD
Implanet plans to acquire a majority stake in Orthopaedic & Spine Development, developer and manufacturer of implants for spine surgery. OSD’s lineup includes a range of cages, plates and fixation systems for lumbar and cervical applications.
“This merger with OSD will strengthen our spinal implant range, notably for the adult market, while positioning Implanet as an integrated supplier capable of competing with the market’s largest players,” said Ludovic Lastennet, CEO of Implanet. “The merger will enable us to rapidly achieve a critical mass in terms of revenue. Reaching this critical mass will ensure that, in the coming years, we will be able to meet regulatory, clinical and economic demands in a fast-growing market.”
In 2Q20, Implanet announced that it was shifting its strategy to focus on accelerating growth of its spine business, especially in priority geographic regions such as the U.S., Brazil and Europe.
Mr. Lastennet said that the company had become a pivotal player in pediatric spinal deformity through its JAZZ technology. But the company’s portfolio range limited its ability to grow at a similar pace in the degenerative adult segment and thus looked for an attractive acquisition to build out its product line.
Neo Medical Purchases Trios Medical
Neo will leverage years of collaboration with TriOs as the company’s exclusive commercialization partner in the region to strengthen its position in the thoracolumbar fixation market.
Neo launched its first product in Germany in 2017. Since then, the company’s products have been used in over 10,000 surgeries, with over 90% of cases performed by recurrent users.
In 2020, Neo Medical closed a financial round of CHF 13.2 million (~USD $13.4 million). Funds were expected to support global growth and expansion in targeted markets. The company also announced that it experienced revenue growth of 45% in 2020 and remains on a rapid development trajectory despite COVID-19’s impact on orthopedics and the economy.
“This year will continue to see the company accelerating in our two strategic markets, Germany and the U.S., starting with the milestones announced today, while growing rapidly in the other European regions where we currently operate,” Vincent Lefauconnier, Neo Medical CEO, said about the TriOs acquisition.
Overall, the orthopedic market’s M&A activity has been weighted more toward spine in recent years, partly because there are hundreds of players in the space and partly because there’s an appetite for implant innovation and enabling technology. We expect acquisitions to remain an important strategy as spine companies seek to bolster their portfolios. ¢
Julie A. Vetalice and Mike Evers are ORTHOWORLD editors.
The heavily player-populated spine market continues to be an active space for mergers and acquisitions, as companies of all sizes seek to build out their implant and technology portfolios. Four of the six publicly announced orthopedic OEM transactions we tracked in 1Q21 were spine-related.
Three of the acquisitions – NuVasive’s purchase of...
The heavily player-populated spine market continues to be an active space for mergers and acquisitions, as companies of all sizes seek to build out their implant and technology portfolios. Four of the six publicly announced orthopedic OEM transactions we tracked in 1Q21 were spine-related.
Three of the acquisitions – NuVasive’s purchase of Simplify Medical, Implanet’s merger with Orthopaedic & Spine Development (OSD) and Neo Medical’s purchase of TriOs Medical – allow the buying company to expand their implant portfolios. SeaSpine’s acquisition of 7D Surgical moves the company firmly into the enabling technology space.
NuVasive Acquires Simplify Medical
NuVasive Simplify Disc
NuVasive acquired Simplify Medical and its Simplify Cervical Artificial Disc for $150 million in cash, along with future milestones related to regulatory approval and sales.
Simplify Disc is designed for MRI compatibility, physiologic motion and anatomical height-matching. The disc was granted premarket approval from FDA for 1-level cervical indications in late 2020 and two-level cervical total disc replacement in April. It is one of three devices approved for use in two-level cervical total disc replacement, including Medtronic’s Prestige LP and Zimmer Biomet’s Mobi-C.
“The acquisition of Simplify Medical advances our previously communicated long-term growth strategy by both expanding, and further distinguishing, our portfolio with industry-leading innovation,” said NuVasive CEO Chris Barry. “Combining the Simplify Disc with NuVasive’s C360 portfolio will enable us to provide surgeons with world-class cervical technology, regardless of their preferred procedural approach.”
NuVasive estimates cervical spine market revenue at $2.6 billion. While it doesn’t expect revenue from Simplify until 2022, NuVasive leadership noted that the artificial disc has a revenue upside of $250 million to $300 million.
SeaSpine Acquires 7D Surgical
SeaSpine agreed to acquire all issued and outstanding shares of 7D Surgical. The transaction, valued at $110 million, is expected to close in 2Q21.
The companies partnered in a strategic alliance in February 2020 to distribute 7D Surgical’s navigation system founded upon its machine-vision, image-guided platform. The system reduces radiation by eliminating intra-operative CT and fluoroscopy, with the patient registration process taking 30 seconds compared to 30 minutes with traditional systems.
According to analysts, 7D Surgical had 54 systems placed and contractual sales of over $19 million as of March. SeaSpine expects to place units in 2021.
SeaSpine leadership said that COVID slowdowns allowed the two companies to more closely collaborate in their co-marketing agreement. The acquisition further enhances SeaSpine’s ability to provide a complete, integrated and seamless procedural solution and allows them to better compete with medium and large spine companies with enabling technology platforms.
Implanet Acquires Stake in OSD
Implanet plans to acquire a majority stake in Orthopaedic & Spine Development, developer and manufacturer of implants for spine surgery. OSD’s lineup includes a range of cages, plates and fixation systems for lumbar and cervical applications.
“This merger with OSD will strengthen our spinal implant range, notably for the adult market, while positioning Implanet as an integrated supplier capable of competing with the market’s largest players,” said Ludovic Lastennet, CEO of Implanet. “The merger will enable us to rapidly achieve a critical mass in terms of revenue. Reaching this critical mass will ensure that, in the coming years, we will be able to meet regulatory, clinical and economic demands in a fast-growing market.”
In 2Q20, Implanet announced that it was shifting its strategy to focus on accelerating growth of its spine business, especially in priority geographic regions such as the U.S., Brazil and Europe.
Mr. Lastennet said that the company had become a pivotal player in pediatric spinal deformity through its JAZZ technology. But the company’s portfolio range limited its ability to grow at a similar pace in the degenerative adult segment and thus looked for an attractive acquisition to build out its product line.
Neo Medical Purchases Trios Medical
Neo will leverage years of collaboration with TriOs as the company’s exclusive commercialization partner in the region to strengthen its position in the thoracolumbar fixation market.
Neo launched its first product in Germany in 2017. Since then, the company’s products have been used in over 10,000 surgeries, with over 90% of cases performed by recurrent users.
In 2020, Neo Medical closed a financial round of CHF 13.2 million (~USD $13.4 million). Funds were expected to support global growth and expansion in targeted markets. The company also announced that it experienced revenue growth of 45% in 2020 and remains on a rapid development trajectory despite COVID-19’s impact on orthopedics and the economy.
“This year will continue to see the company accelerating in our two strategic markets, Germany and the U.S., starting with the milestones announced today, while growing rapidly in the other European regions where we currently operate,” Vincent Lefauconnier, Neo Medical CEO, said about the TriOs acquisition.
Overall, the orthopedic market’s M&A activity has been weighted more toward spine in recent years, partly because there are hundreds of players in the space and partly because there’s an appetite for implant innovation and enabling technology. We expect acquisitions to remain an important strategy as spine companies seek to bolster their portfolios. ¢
Julie A. Vetalice and Mike Evers are ORTHOWORLD editors.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
