Medical device firm Orthofix International has agreed to acquire Spinal Kinetics , a privately held developer and manufacturer of artificial cervical and lumbar discs.
Terms of the agreement include $45m in cash closing consideration plus up to $60m in contingent milestone payments related to U.S. Food and Drug Administration approval of the M6-C cervical disc and the achievement of trailing twelve-month sales targets of $30 million and $50 million.
Orthofix president and CEO Brad Mason said: “The Spinal Kinetics M6™ artificial discs will further strengthen Orthofix’s product portfolio by filling a strategic gap in our Spine Fixation product line. This technology is a significant advancement in mimicking the natural motion of the spine, which we believe will be very beneficial to patients and well received by our surgeon customers.
“This acquisition is very well aligned with our value creation strategy of accelerating topline growth by investing in faster growing market segments in our core businesses. In addition, we expect this news will energize our sales force and be attractive to potential new sales talent.”
Spinal Kinetics manufactures and distributes the M6-C cervical and M6-L lumbar artificial discs for patients suffering from degenerative disc disease (DDD) of the spine. These unique discs are designed to mimic the anatomic structure of a natural disc by incorporating an artificial visco-elastic nucleus and fiber annulus. This allows for six degrees of motion, similar to a natural disc.
“Artificial disc replacement is increasingly being indicated as the superior surgical solution to the traditional spinal fusion because it maintains normal motion of the spine and in many cases lessens the chance of future surgery.
“However, the designs of the first-generation artificial discs, much like total hip replacement, were based on the ball-and-socket concept which does not take into account the natural compression of the native disc,” said Dr. Richard D. Guyer, orthopedic spine surgeon and Chairman of the Texas Back Institute Research Foundation in Dallas and an investigator in the “Restore” U.S. clinical trial sponsored by Spinal Kinetics.
The M6 artificial discs currently have CE Mark approval for distribution in the European Union and other international geographies.
They are not available for commercial distribution in the U.S. Spinal Kinetics has submitted a PMA to the U.S. Food and Drug Administration in order to gain U.S. market approval for the M6-C cervical disc to treat single level cervical DDD. Internationally, there have been more than 54,000 implants of the M6-C and M6-L since the products were first launched in 2006.
Orthofix International N.V. is a global medical device company focused on musculoskeletal healing products and value-added services. The Company’s mission is to improve patients' lives by providing superior reconstruction and regenerative musculoskeletal solutions to physicians worldwide.