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Current & Critical

Spine Merger & Acquisition Activity Going Strong

By Julie A. Vetalice

Updated September 2018 to include additional transactions from 3Q18.

Throughout 2017 and thus far in 2018, players of all sizes in the spine segment have taken a variety of steps to fill portfolio gaps, bolster growth and remain competitive.

Collaborations are one way that companies gain momentum and carry innovation forward, better, together—as seen with K2M and Brainlab or NuVasive and Siemens Healthineers, or the announced merger of Mazor and Medtronic, to name a few. Further are the distribution agreements that are too numerous to mention here, which allow access to new geographies and technologies without having to develop from scratch.

With 1H18 spine revenue growth reporting all over the board, and still without concrete consensus from companies and analysts on the state and future of the segment, I got really curious about M&A transactions in the space. What have companies done to purchase what they needed or divest what wasn’t the best fit?

We’ve tracked 31 mergers and acquisitions by 25 companies in the spine space from 2017 through 2018 year to date. (Spine is the dominant market for acquisition activity among orthopaedic device companies.) In the table below I’ve captured this activity, showing who bought and sold and what they got in the transaction. Where financial details were available, they’re included. (While we separate spine and its associated biologics when reporting revenue, I think it makes sense to show orthobiologic-related announcements here.)

 

Details Announced
Alphatec Spine acquired SafeOp Surgical, provider of neuromonitoring technology, for $15MM. SafeOp’s technology automates SSEPs (Somatosensory Evoked Potentials), and is designed to obviate the need for a technician or other neuromonitoring professional in most procedures. 
 
1Q18
Amendia acquired Spinal Elements, provider of implants, instruments and orthobiologics. The acquired technologies, including Ti-Bond porous titanium coating, Hero allograft, the Lucent XP expandable cage and Clutch interspinous process device will complement Amendia’s Overwatch pedicle screw, Syzygy reduction screw and Ceres cervical product lines. The final entity has taken on the Spinal Elements name.
 
2Q17
Bioventus entered into a definitive agreement to divest its next-gen bone morphogenetic protein development program to Viscogliosi Bros. (VB). The transaction is slated to close in 3Q18. A new company will be formed and initiate a clinical program to evaluate the BMP for spinal fusion. At completion, Bioventus will receive an equity stake in the new company formed by VB and will hold an observational board seat to follow the progress. 
 
3Q18
Centinel Spine acquired worldwide prodisc total disc replacement assets from DePuy Synthes Products. The entire acquired portfolio included prodisc C and prodisc L in the U.S., and prodisc VIVO, prodisc NOVA, prodisc C, prodisc L and prodisc O plus the DISCOVER Cervical device to market ex-U.S.
 
4Q17
Cook Medical sold its vertebroplasty product line to IZI Medical Products
 
2Q17
CoreLink acquired Expanding Orthopedics, developer of the FLXfit line of expanding interbody devices. CoreLink gains the FDA-cleared expanding, articulating FLXfit and FLXfit 15 titanium TLIF interbody systems, as well as an array of patents and a development pipeline addressing expandable interbodies and spinal fusion. 
 
2Q18
CTL Medical will acquire the commercial spine business of Amedica via asset purchase agreement for $10.0MM. CTL will exclusively own the portfolio of  metal and silicon nitride spine devices, and will have access to future SiNi spine products. 3Q18
DePuy Synthes acquired Sentio and its nerve localization technology for minimally invasive spine surgery. The technology reportedly eliminates the need for a neuromonitoring specialist and has a minimal footprint in the operating room. The platform’s surgeon-driven approach will assist DePuy in reaching more customers in global ASC settings. 
 
2Q17
DePuy Synthes entered into an asset purchase and development agreement with Interventional Spine, addressing expandable fusion cages and a facet screw system for open and percutaneous spine surgery. DePuy Synthes intends to significantly expand access to the expandable technology via its global sales network. 
 
1Q17
Emerging Implant Technologies acquired a portfolio of 22 issued and pending patents covering 3D printed expandable spinal fusion cages for vertical and lateral expansion, addressing multiple geographies.
 
3Q17
Exactech restructured its Spine & Biologics segment and divested its spine product assets to ChoiceSpine. EXAC’s spinal products encompassed cervical, thoracolumbar and interbody implants and minimally invasive instrument systems. ChoiceSpine also gains distribution channels in Germany, Portugal and Spain, adding to its present partners in Italy and Mexico.
 
1Q17
Fuse Medical, a U.S. distributor, acquired Maxim Surgical, manufacturer of interbody spacers and distributor of a variety of spine, sports medicine and biologics. Its portfolio includes the Maxim Surgical X-Treme Interbody Fusion System, which received FDA 510(k) clearance in 2013. Fuse intends to develop additional spinal implants.  3Q18
Globus Medical acquired KB Medical, Switzerland-based developer of the AQrate Robotic Assistance system. GMED doesn’t plan to commercialize the robot, but will use its technology to shape future enhancements to the ExcelsiusGPS robotic guidance and navigation system.
 
2Q18
Globus Medical is acquiring Nemaris, developer of Surgimap software used to preoperatively plan spine surgery. 3Q18

IZI Medical has acquired Benvenue Medical’s vertebral augmentation systems portfolio, which includes the Kiva® VCF Treatment System, Kiva® Pilot and Blazer® Vertebral Augmentation System devices, is used for treatment of spinal fractures.

3Q18
Johnson & Johnson Medical Devices' German affiliate acquired EIT Emerging Implant Technologies, a manufacturer of 3D-printed titanium interbodies for spinal fusion. 3Q18
K2M acquired Cardinal Spine’s cervical static corpectomy cage, to be branded as the PALO ALTO system. 
 
4Q17
K2M acquired e-Fellow, a service-based technology that collects real-time data to monitor patient outcomes.
 
1Q17
Medacta acquired Vivamed, its Austrian distributor of 15 years. 
 
1Q17
Medtronic entered into a definitive agreement to acquire Mazor Robotics for $1.64BB in cash in a transaction that is slated to close in 1Q19. 3Q18
NuVasive acquired SafePassage, provider of intra-op neurophysiological monitoring (IONM) services. The company joined NUVA’s Clinical Services business, where it contributed $4.5MM in 1Q18 revenue. The agreement reportedly positions NCS as the largest provider of outsourced IONM services in the U.S.
 
1Q18
NuVasive acquired Vertera Spine, developer of porous-PEEK-based spinal interbody fusion devices. With the purchase, NUVA is presently the sole device company offering both PEEK and titanium porous interbody devices to suit surgeon preference and encourage bone ingrowth. NUVA will sell COHERE cervical and COALESCE lumbar interbody fusion systems in the U.S., and plans to apply porous PEEK technology to its product development pipeline.
 
3Q17
Orthofix purchased Spinal Kinetics for $45MM in cash plus up to $60MM in potential milestone payments, including FDA Premarket Approval of the M6-C cervical disc for single-level use. The acquired portfolio comprises the M6-C and M6-L cervical and lumbar artificial discs, which are CE Marked in the EU. Per the 2Q18 OFIX earnings call, M6-C is on target for the PMA in 2019—likely mid-year.
 
1Q18
RTI Surgical entered into an agreement to acquire Zyga Technology, gaining access to the SImmetry Sacroiliac Joint Fusion system. (The company had also developed the Glyder Facet Restoration Device. SImmetry is commercially available, while Glyder is not.)
 
1Q18
Safe Orthopaedics acquired the salesforce of Qspine, its U.K. distributor since 2014. Sales are expected to begin contributing to growth in 2H18. Qspine’s single-use sterile illuminated radiolucent SURE retractor, recently CE Mark approved, is complementary to Safe Ortho’s SteriSpine kits to treat spinal fracture. Safe Orthopaedics will solely distribute SURE in France, and will promote it in the U.K. 
 
2Q18

Stryker announced a definitive agreement to purchase instrument manufacturer Invuity in a transaction valued at $190MM and expected to close in 4Q18. Invuity has a portfolio of single-use, lighted instruments that deliver enhanced visualization for several applications, including arthroplasty and spine. 

3Q18

Stryker is acquiring K2M for $1.4BB in cash. K2M will become a wholly-owned SYK subsidiary.

3Q18
Stryker acquired Vexim, developer of the SpineJack expandable vertebral compression fracture implant, for ~$191.0MM. Vexim’s portfolio complements SYK’s Interventional Spine division, which addresses vertebral augmentation, vertebroplasty and radiofrequency ablation procedures as well as diagnostic decompression tools for contained disc herniation. SYK gains Vexim’s direct salesforce in France, Germany, Spain and Italy, and an international distribution network in Eastern Europe, the Middle East, Latin America and Asia. Vexim is expected to file for FDA 510(k) clearance of SpineJack in 2018. The product may overtake Stryker’s AVAflex vertebral augmentation product, acquired from BD in 2Q16.
 
4Q17
United Orthopedic acquired A-Spine Asia, developer of spinal fixation, osteoplasty and vertebral body replacement systems, for $20.0MM. The acquisition expands UOC's sales in China, where A-Spine is presently registered. A-Spine's portfolio includes Combo Ti/PEEK Cages configured for ACDF, PLIF, TLIF and P/TLIF.
 
2Q17
Wenzel Spine acquired PrimaLOK SP Interspinous Fusion and PrimaLOK FF Facet Fixation systems from OsteoMed. The acquired platforms represent a polyaxial interspinous process device and percutaneous facet screw system designed for MIS applications in the lumbar spine, and provide supplemental fixation when used with Wenzel Spine’s standalone, expandable VariLift-LX interbody fusion device.
 
1Q17
Zavation acquired Pan Medical (PanMed), a manufacturer of products used in kyphoplasty and interventional radiology.
 
3Q18


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