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Year in Review

2014: A Recap of Strategic Activities

To begin 2015, let’s look back at what fueled growth in 2014. Here, we present companies that have merged and emerged, products that launched, projects that received funding. (Please note, ORTHOKNOW July 2014 features a review of 1H14 funding activity.)

Lending perspective from your peers, this issue includes insights gathered at the 2014 Musculoskeletal New Ventures Conference, as well. See companion articles,
“Business Development Execs Speak on M&A and Innovation” and “Industry Investments Stay Steady, Focus on Established Technologies.”

  This 2014 recap is also available by market segment:

Arthroscopy/Soft Tissue Repair
Fracture Repair
Joint Replacement
Orthobiologics
Spine



Start-ups, spin-outs and subsidiaries identified during 2014 included:

Apollo Implants, LLC
Canton, Ohio, USA

  • Seeks funding to commercialize Injectable Spinal Disc technology that employs nano-polymer to mechanically stabilize the disc from within
  • CEO is lead researcher on one of the first nanotech nucleus pulposus spinal implant devices
  • Attempted to raise funds via Indiegogo and Kickstarter campaigns


Bone Biologics Corp.
Thousand Oaks, California, USA

  • Development stage entity (formed following a reverse merger of the privately-held company and AFH Acquisition; Musculoskeletal Transplant Foundation remains the largest shareholder)
  • Will continue development of Nell-1 bone growth factor as a lower-cost, more effective alternative to current bone growth factor products for lumbar spinal fusion


Cocoon Biotech Inc.
Brookline, Massachusetts, USA

  • Completed seed funding to support animal study and optimization of a silk-based injectable gel for the treatment of osteoarthritis
  • Conducting pre-clinical studies to demonstrate long-term efficacy of products
  • Silk microsphere lubricant product will require premarket approval, could be commercialized by 2020


GEN2 Medical
Cleveland, Ohio, USA

  • Formed to import, manufacture and sell instruments and devices for use in all surgical specialties, with a primary focus on neurosurgery, orthopaedics and spine
  • Also partners with surgeon inventors to support more control over product development
  • Exclusive U.S. distributor of Rebstock spinal instruments from Germany


SeaSpine
Vista, California, USA

  • SeaSpine was acquired in 2Q11 by Integra LifeSciences for $89MM
  • Now spinning out as a publicly-traded company to develop, market and sell spinal hardware and orthobiologics; expected to close by end of 2015
  • Will operate as an independent entity with an estimated $140MM of trailing 12-month revenue as of 9/30/14


Seikagaku U.S.A.
Jersey City, New Jersey, USA

  • Established to support U.S. sales and marketing of products such as SUPARTZ® multi-injection and Gel-One® single-injection joint therapies
  • Parent company headquartered in Japan


Syncera
Andover, Massachusetts, USA

  • Launched by Smith & Nephew in the U.S. to offer hospitals the SYNERGY stem + REFLECTION CUP and the GENESIS II knee, clinically-proven primary joint replacement products that should address >80% of procedures and represent at least five to ten percent of the U.S. market
  • Includes technology to streamline supply chain and logistics, ensure automatic replenishment, etc., and technical support and training in lieu of a rep in the OR
  • Healthcare providers enter into a multi-year contract to purchase the instrument set and own the implant inventory, allowing implants to be offered at a substantial discount to U.S. average price


UOC USA
Irvine, California, USA

  • Established by United Orthopedic to market cost-effective hip and knee arthroplasty implants and instruments in the U.S.
  • Parent company headquartered in Taiwan


Vexim Inc.
Norcross, Georgia, USA

  • Formed a U.S. subsidiary to support planned early-2015 commercial launch of vertebroplasty and kyphoplasty solutions, such as SpineJack®
  • Parent company headquartered in France


Closures, restructuring and rebranding announced in 2014 included:

Aastrom Biosciences: Changed name to Vericel and moved headquarters to Cambridge, Massachusetts; will maintain operations and key corporate functions in Ann Arbor, Michigan. (Aastrom acquired Sanofi’s autologous cell therapies in 2Q14.)

AxioMed Spine: Acquired by KICVentures, which also backs SpineFrontier; developed technology to restore cervical and lumbar disc function, including the Freedom® artificial disc platform

Baxano Surgical: Auctioning product lines (minimally invasive approaches to treat degenerative lumbar spinal conditions); delisted from NASDAQ as of mid-4Q

Olympus Biotech: Discontinued operations and product availability in the U.S. following lack of traction to build a broader regenerative medicine portfolio

Wright Direct: Rebranded as Implant Partners, a provider of cost-effective orthopaedic implants and services, selling directly to hospitals; wholly-owned subsidiary of MicroPort Orthopedics

M&A Activity in 2014:


ORTHOWORLD’s Merger & Acquisition database recorded 41 transactions in 2014. The table below captures select OEM activities; visit the M&A database to see all 41, including numerous deals among suppliers.

Also announced in 2014, and not yet closed:

  • Medtronic to acquire Covidien (slated for early 2015)
  • Wright Medical merging with Tornier (slated for 1H15)
  • Zimmer to acquire Biomet (slated for 1Q15)
     
Acquiring Company  Acquired Company
Aastrom Biosciences (now Vericel) Sanofi Cell Therapy and Regenerative Medicine cell therapies
Bioventus Advanced Biologics' OsteoAMP, tissue-based bone biologic
Cardinal Health Emerge Medical, low-physician-preference trauma products
Cayenne Medical TGS Knee Innovations/Mirror Partial Knee
Corin Optimized Ortho kinematic joint simulation software
Globus Medical  Excelsius Surgical robotic positioning platform
Globus Medical  Transplant Technologies of Texas allografts/tissue
MicroPort Orthopedics Wright Medical's OrthoRecon business 
Smith & Nephew  ArthroCare arthroscopy/soft tissue, etc.
Stryker CoAlign Innovations interbody fusion device
Stryker Pivot Medical hip arthroscopy
Stryker Small Bone Innovations extremities repair
United Orthopedic (merged with) Breg braces, soft goods
Wright Medical OrthoPro foot/ankle products
Wright Medical Solana Surgical extremities repair
Zimmer ETEX bone substitutes


Fundings identified during 2H14, by market segment, included:

Arthroscopy/Soft Tissue

Rotation Medical secured $27.2MM in an oversubscribed Series B financing

  • To support commercial launch, post-market studies of treatment for rotator cuff disease


Trice Medical closed 1st tranche of a $11.6MM Series B financing

  • To support commercialization of mi-eye™ single-use visualization device to perform diagnostic arthroscopy in the physician’s office during initial consultation


Fracture Repair

Conventus Orthopaedics completed a $24MM Series AA equity round

  • To support clinical activities, commercial launch of Conventus DRS™ for distal radius fractures, commercialization of the Proximal Humerus PH fracture system, R&D for new indications, such as lower extremities


Joint Reconstruction

Consensus Orthopedics raised $8MM of a planned $9MM round

  • To support general growth, new product launches, etc. of total knee and hip replacement devices

OrthAlign completed a $15MM preferred series capital raise

  • To support 2015 launch of the OrthAlign Plus® hip arthroplasty navigation device, sales and marketing, international distributor expansion


Orthobiologics

Avitus Orthopaedics raised $1MM in capital

  • To support product commercialization, company growth; developing minimally invasive bone graft harvesting device


Bacterin awarded a $0.2MM grant from the Montana Board of Research and Commercialization Technology

  • To support development and commercialization of a novel regenerative medicine technology


Bone Biologics completed a $5MM funding round

  • To support manufacturing of UCB-1 (a.k.a. Nell-1) recombinant human protein for human clinical trials


Histogenics expects to raise net public offering proceeds of ~$57.2MM

  • ~5.9MM shares of its common stock at $11/share
  • To support ongoing Phase III clinical trial of NeoCart knee cartilage repair product, facility growth, etc.


SIRAKOSS secured £3.1MM (~$4.8MM) in Series A financing

  • To support product development and regulatory strategy implementation in Europe and the U.S. for MaxSi™ synthetic bone grafts


Tissue Regeneration Systems raised $2MM in funding

  • Developed scaffold and coating technologies for use in skeletal reconstruction


Spine

Amedica raised $13MM in a public offering

  • ~11.44MM units at $1.14/unit
  • Will support R&D and operations during advancement of direct sales of silicon nitride through own channels


Intrinsic Therapeutics raised $17.3MM of a planned $20.8MM round

  • Developed Barricaid® prosthesis for partial anular replacement


Ortho Kinematics raised ~$0.5MM of a planned $0.75MM financing

  • Developed fluoroscopy-based VMA™ (Vertebral Motion Analysis) diagnostic tool to generate patient-specific graphs for each vertebral level


Zyga Technology completed a $10MM financing round

  • To support U.S. sales and marketing in advance of a 2015 Category 1 CPT code implementation for SI joint fusion procedures and 3 clinical studies of the SImmetry Sacroiliac Joint Fusion System and GlyDer Facet Restoration Device


Other

Nimbic Systems awarded a $1.5MM grant from the National Institutes of Health

  • To support a pivotal, multi-center clinical trial of the Air Barrier System for the prevention of implant infections in hip arthroplasty, spine fusion, acetabular reconstruction, etc.


Surgical Frontiers closed a $7MM fund

  • To invest in its incubator focused upon musculoskeletal surgical technology start-ups
  • Initial funding commitments have been made to 3 portfolio companies addressing foot/ankle, sports medicine and trauma


Product launches in 2014 included:

Arthroscopy/Soft Tissue Repair

Biomet Sports Medicine
JuggerKnotless Soft Anchor

  • All-suture knotless device for labral repair in the shoulder
  • 2.1mm drill hole preserves bone, allows more freedom in anchor placement
  • Demonstrated 57 lbs. of pullout strength


Fracture Repair

MedShape
DynaNail® TTC Fusion System

  • Internal shape memory element is stretched during nail insertion; once nail is fixed in place with screws, shape memory element maintains target fusion bones in close apposition and under sustained compression for longer time periods than static, non-adaptive intramedullary devices
  • Successfully implanted in >100 tibiotalocalcaneal fusion procedures during targeted beta launch
  • Large number of high-risk patients reportedly experienced fusion with DynaNail, including many requiring bone allograft


Paragon 28
GORILLA™ R3CON Foot Plating System

  • Initial U.S. commercial launch
  • Ten interchangeable subsystems, may be used for MTP fusion, Lisfranc stabilization, Lapidus procedures, various opening wedge osteotomies
  • Includes array of non-site-specific plates for various procedures
  • Supplants Normed product line previously distributed by Paragon 28


Smith & Nephew
D-RAD SMART PACK™

  • For distal radius fractures
  • Includes 4 complete single-use sterile instrument kits with implants and a tray of sterile packaged fasteners/templates
  • Offers Chart Sticks™ to record part numbers for every patient, and individually packed screws that may reduce waste further by eliminating the need to discard unused screws


Joint Replacement

Cayenne Medical
Mirror™ Partial Knee

  • Uses patient’s own ligaments to balance knee as definitive bone cuts are made, thus balancing the knee throughout the entire range of motion
  • To offer the procedure, facilities do not need to acquire expensive equipment or incur additional costs tied to approaches that rely on software from CT or MRI imaging studies to create cutting guides for surgeons


DePuy Synthes Joint Reconstruction
ATTUNE® Rotating Platform Knee

  • Designed to improve conformity, stability throughout range of motion
  • Supports tibial insert to self-align and track with femoral component throughout range of motion


DJO Global
e+™ blended vitamin E polyethylene bearing for reverse shoulder

  • Marked 1st surgical use
  • Demonstrated 92% wear rate reduction while maintaining yield strength of conventional polyethylene
  • Reportedly the only company that offers blended vitamin E polyethylene throughout entire shoulder portfolio


Exactech
ExactechGPS® Guided Personalized Surgery

  • Reportedly the 1st advanced surgical technology to offer truly real-time patient-specific approach to total knee arthroplasty
  • Includes instantaneous data and imaging
  • Supports range of soft tissue strategies, ligament balancing options, less invasive approaches and techniques


Smith & Nephew
JOURNEY™ II Cruciate Retaining Knee

  • Preserves the posterior cruciate ligament; applies PHYSIOLOGICAL MATCHING™ technology using LIFEMOD™ human simulation software to analyze and account for bone, ligament and muscle forces within the design of an implant
  • Made from VERILAST™ technology (proprietary OXINIUM alloy + highly cross-linked plastic liner)


Wright Medical
INFINITY® Total Ankle Replacement

  • Full U.S. commercial launch; also available on a limited basis in select ex-U.S. countries
  • Combines low-profile implant and seamless integration with PROPHECY® Pre-Operative Navigation Alignment Guides
  • Features talar resurfacing option for preservation of talar bone, and a tibia design compatible with the INBONE® II System
  • Talar component of INFINITY is interchangeable with the INBONE II, which may serve as a revision option


Spine

Aurora Spine
ECHO™ (PLIF) and ECHO XL™ (OLIF) MIS Interbody Systems

  • Next-generation lumbar interbody cages featuring TiNano™ titanium spray coating to provide additional roughness and porosity, increased possibility of bone ongrowth and enhanced radiographic visibility
  • TiNano will be available on all Aurora interbody cages, including Cervical, PLIF, OLIF, TLIF, ALIF and LLIF


Benvenue Medical
Kiva® VCF Treatment System

  • Implant-based solution for vertebral augmentation, next-generation alternative to balloon kyphoplasty
  • Data from 3 studies indicate that Kiva met or exceeded balloon kyphoplasty in the reduction of pain and restoration of function in treating VCFs, improved kyphotic angle restoration, reduced the rate of cement extravasation and reduced the rate of adjacent fractures one year after treatment


Medicrea
UNiD

  • Europe launch
  • Patient-specific spinal osteosynthesis rod system designed to eliminate manual bending of rods in the OR during surgery
  • Software + real-time support help surgeons preoperatively analyze, design and order patient-specific rods


Spine Wave
Lateral Access Product portfolio

  • StaXx® XDL and IBL expandable devices, Abacus™ Lateral Spacer, XLR® Lateral Access system and full line of single-use accessories
  • Portfolio offers multiple expandable implant options as well as a more traditional non-expandable PEEK implant


Spineology
VIA™ Spinous Process Fixation System

  • Reportedly 1st Spinous Process Plate with independently compressible superior and inferior plates that are contoured to maximize the fit between the implant and the spinous processes/associated laminae
  • Part of the Anatomy Conserving Technology (ACT™) line


Titan Spine
Warranty for Endoskeleton® spinal interbody fusion devices

  • Provides a 1-time free replacement of any eligible Titan spinal interbody fusion device if revision surgery is required within the 5-year warranty period, per agreement terms
  • Endoskeleton® devices feature proprietary implant surface technology with roughened topographies at the macro, micro and cellular levels to create optimal host/bone response and actively participate in the fusion process


Orthobiologics

Anika Therapeutics
MONOVISC® High Molecular Weight Hyaluronan

  • 1st U.S. commercial sale as a single-injection treatment for knee osteoarthritis pain
  • First/only non-avian sourced single-injection HA approved for sale in the U.S.; available in EU since 2007
  • Received unique J-Code (J 7327) mid-4Q14
  • Sold via license agreement with DePuy Synthes Mitek Sports Medicine


RTI Surgical
Precision Allograft Cartilage Kit (PACK)

  • Instrumentation set for osteochondral allograft resurfacing
  • Designed to improve precision, minimize cartilage trauma
  • Intended to provide a more uniform cartilage contact surface, more precise fit of allograft into recipient’s socket


A portion of this article appeared in the December 2014 issue of BONEZONE®.

Sources: Company press releases, earnings calls, filings with the U.S. Securities and Exchange Commission, company web sites, articles in the public domain, etc.