The transaction is expected to close in the first quarter of 2013 and is subject to customary closing conditions, including BioMimetic shareholder approval. The transaction received the unanimous approval of the board of directors of both Wright and BioMimetic. In addition, several key shareholders of BioMimetic have evidenced their support of the transaction by entering into agreements to vote in favor of the transaction.
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.”
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.”
BioMimetic’s Augment ® product line is based on recombinant human platelet-derived growth factor (rhPDGF-BB), a synthetic copy of one of the body’s principal healing agents. In May 2011, the FDA’s Orthopaedic and Rehabilitation Devices Panel of the Medical Devices Advisory Committee voted favorably on Augment ® Bone Graft’s safety, efficacy and benefit to risk profile for its use as an alternative to autograft in hindfoot and ankle fusions. In January 2012, BioMimetic announced receipt of a post-panel non-approvable letter requesting additional information in a PMA amendment. In June 2012, BioMimetic submitted a responsive PMA amendment, and the product is currently pending a final FDA regulatory decision. If approved, Augment ® Bone Graft will be the first clinically proven protein therapeutic to come to the orthopedics market in a decade, offering the potential to reinforce surgical bone repair in hindfoot and ankle fusion procedures effectively, which translates into an estimated market opportunity believed to be approximately $300 million annually in the U.S. Augment ® Bone Graft 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.Although Wright cannot finalize the purchase price allocation and fair value assessment of the contingent consideration until the closing, and thus cannot yet assess the exact impact on its future GAAP earnings, Wright anticipates that the transaction will be dilutive to adjusted EBITDA until the second full-year post-FDA approval of Augment ® Bone Graft and accretive thereafter. Wright will provide additional information on the financial impact of this transaction after the closing. In connection with this transaction, J.P. Morgan Securities LLC and Wilson Sonsini Goodrich & Rosati, a Professional Corporation advised Wright Medical, and Goldman, Sachs & Co. and Ropes & Gray LLP advised BioMimetic Therapeutics.