Tuesday, October 28, 2014

News: Wright Medical Group, Inc. and Tornier N.V. Agree to Merge Creating Premier High-Growth Extremities-Biologics Company

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both Wright and Tornier, each outstanding share of Wright common stock will be exchanged for 1.0309 ordinary shares of Tornier. Upon completion of the merger, Wright shareholders will own approximately 52% of the shares of the combined company on a fully diluted basis and Tornier shareholders will own approximately 48%. For Tornier shareholders, the exchange ratio implies a per share value for Tornier that represents a 28% premium to Tornier’s closing share price on October 24, 2014, the last trading day prior to the parties entering into the agreement.

Following the closing of the transaction, the combined company will conduct business as Wright Medical Group N.V. and will leverage the global strengths of both product brands as a pure play Extremities-Biologics business. The combined company will have its U.S. headquarters in Memphis, TN, where Wright’s current headquarters is located. Wright Medical Group N.V. will be led by Robert Palmisano, who will become president and chief executive officer of the combined company. David Mowry, Tornier’s president and chief executive officer, will become executive vice president and chief operating officer of the combined company. Wright Medical Group N.V.’s board of directors will be comprised of five representatives from Wright’s existing board and five representatives from Tornier’s existing board, including Robert Palmisano and David Mowry.

The merger of Wright and Tornier will create a mid-sized growth company uniquely positioned with leading technologies and specialized sales forces in three of the fastest growing areas of orthopaedics – Upper Extremities, Lower Extremities and Biologics. That leadership will be further enhanced by anticipated final U.S. Food and Drug Administration (FDA) premarket approval of Augment® Bone Graft, adding additional depth to what will be one of the most comprehensive extremity product portfolios in the industry as well as providing a platform technology for future new product development. The highly complementary nature of the two businesses will give the combined company significant diversity and scale across a range of geographies and product categories.

As announced separately today, Wright received an Approvable Letter from the FDA for its Premarket Approval Application (PMA) for Augment® Bone Graft. The approvable letter indicates that FDA determined Augment® Bone Graft to be safe and effective as an alternative to autograft for ankle and/or hindfoot fusion indications and is approvable subject to customary preapproval facilities inspections.
Robert Palmisano, president and chief executive officer of Wright, stated, “This combination will create the premier Extremities-Biologics company with a broad global reach. Together, we will have one of the most comprehensive upper and lower extremity product portfolios in the market, extending our leadership position and further accelerating our growth opportunities and path to profitability, all of which we believe will generate long-term value for our shareholders. In addition, this will provide our employees with opportunities for career growth and development as part of a much larger, dynamic organization.”

David Mowry, president and chief executive officer of Tornier, added, “Wright shares Tornier’s commitment to serving extremities specialists and building the leading global business in this market. Both companies have built a deep and loyal customer base and have highly complementary product portfolios, positioning the combined entity to deliver meaningful value to our shareholders. We believe that partnered together, Wright andTornier will become the fastest-growing company in the Extremities-Biologics industry.”
Palmisano continued, “Today’s positive news on the approvability of Augment Bone Graft is a major milestone that paves the way for commercialization in the U.S. and further underscores our strength in Biologics. This is expected to be a significant catalyst and meaningful new future growth driver for our business.”

Both companies will benefit from opportunities to accelerate growth through combined direct sales and distribution networks, a broad product portfolio and deep customer relationships. The joint products, R&D, sales and distribution talent, medical education and relationships will allow an increased focus on the needs of surgeon specialists. Similarly, patients will benefit from dedicated research and development teams that will power enhanced innovation across the combined product portfolio.

Financial Highlights

This stock-for-stock merger allows shareholders of the combined company to benefit from operational and cost synergies. Once integrated, the companies anticipate revenues of the combined business growing in the mid-teens and adjusted EBITDA margins approaching 20% in three to four years.

The amount of cost synergies is expected to be in the range of $40 million to $45 million anticipated to be fully realized by the third year after completion of the transaction. Expense synergy opportunities include: public company expenses, overlapping support function and systems costs, as well as process and vendor consolidation opportunities across the business.

Wright anticipates that the transaction will be accretive to the combined companies’ adjusted EBITDA in the second full-year after completion of the transaction.


Upon completion of the transaction, the businesses of Wright and Tornier will be combined and incorporated in the Netherlands, where Tornier has been incorporated and headquartered for approximately 8 years. Both companies agreed that maintaining Tornier’s domicile best supported the growth strategy driving the merger. Over the long term, it is anticipated that this structure will provide the company with more accessible cash flow, enhancing its ability to innovate and grow, creating long-term shareholder value.
The U.S. headquarters for the Lower Extremity and Biologics business will be based in Wright’s existing facility in Memphis, TN, and its Augment team will continue to be based at its facility in Franklin, TN. The U.S. headquarters for the Upper Extremity business will be based within Tornier’s existing facility in Bloomington, MN and its U.S. engineering center in Warsaw, IN.

The transaction is expected to be taxable, for U.S. federal income tax purposes, to shareholders of Wright.

The transaction is subject to the customary closing conditions, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, as well as Wright and Tornier shareholder approval.

In addition, TMG Holdings Cooperatief U.A., an affiliate of Warburg Pincus, which holds approximately 22% of Tornier’s outstanding ordinary shares, has evidenced its support by entering into an agreement to vote in favor of the transaction.

The transaction is expected to close in the first half of 2015.

An investor presentation will be available on Wright’s investor website at www.wmt.com. More information about the transaction can also be found at www.ExtremitiesLeader.com.

Saturday, October 25, 2014

News: Medtronic Announces Global Launch of Titanium-Coated Peek Interbody Fusion Devices

    • MEDIA

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        Image Courtesy of Medtronic, Inc.
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        Image Courtesy of Medtronic, Inc.
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        ANATOMIC PEEK PTC Cervical Fusion System

        Image Courtesy of Medtronic, Inc.
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        CORNERSTONE-SR® Ti- Coated Anatomical Cervical Cage

        Image Courtesy of Medtronic, Inc.
    • Medtronic Announces Global Launch of Titanium-Coated Peek Interbody Fusion Devices

    • MEMPHIS, TENN., - October 20, 2014 - Medtronic, Inc. (NYSE: MDT) introduced its Pure Titanium Coating (PTC) platform of interbody fusion devices for the spine today at the 2014 Congress of Neurological Surgeons (CNS) Annual Meeting in Boston. The PTC platform includes four products: the CAPSTONE PTC™ Spinal System, CLYDESDALE PTC™ Spinal System, ANATOMIC PEEK PTC Cervical Fusion System and CORNERSTONE-SR® Ti- Coated Anatomical Cervical Cage. 

      These devices are used to treat patients experiencing pain caused by compression of the spinal cord or nerve roots by helping to restore normal disc height. Disc height restoration may reduce the pressure on the nerve roots and the spinal cord and help alleviate much of the patient’s pain.

      Medtronic’s PTC devices represent an evolution in interbody fusion technology because they are constructed of a combination of the two materials most commonly used in interbody fusion procedures: titanium and polyetheretherketone (PEEK).  Both materials have a long clinical history of being used in orthopaedic and other medical implants. Surgeons have historically preferred interbody spacers made of titanium because of their strength and long clinical history. However, over the last 10 years PEEK has largely replaced titanium as the material of choice because it has a modulus of elasticity that is similar to human cortical bone1 and it does not show up on X-rays2. This radiolucency enables the surgeon to more easily assess the surgical site over time after surgery.  

      With the application of a thin layer of textured pure titanium about 1/10th of a millimeter thick to the top and bottom of each PEEK implant, the PTC devices possess attributes of both PEEK and titanium. Specifically, as demonstrated in mechanical testing compared to PEEK alone, the pure titanium coating has a greater coefficient of friction.3Additionally, this textured coating increases the surface area of the implant, which means there is more area for bone to come into contact with the surface of the implant.4 Yet, the titanium layer is thin enough that it does not change the radiolucency or mechanical properties of the underlying PEEK implant.  

      “Our PTC platform of interbody spacers is the result of our relentless effort to add value to our products and respond to surgeon needs by offering the advantages of combined materials in a single implant,” said Doug King, president of the Spine business and senior vice president at Medtronic. “We will continue to leverage our innovation to produce more advanced and differentiated products for surgeons to use to treat their patients.”
    • For Global Launch
      • The CAPSTONE PTC™ Spinal System and the CLYDESDALE PTC™ Spinal System received U.S. Food and Drug Administration (FDA) 510(k) clearance in March and launched in the U.S. in August. CE Mark (Conformité Européenne) was also received for both systems in July.
      • The CAPSTONE PTC™ Spinal System launched in Western Europe in September.
      • The CAPSTONE PTC™ Spinal System is expected to launch in Japan in November 2015 and CLYDESDALE PTC™ Spinal System is expected to launch in Japan in January 2016.

      For U.S. Launch Only
      • The ANATOMIC PEEK PTC Cervical Fusion System has received FDA 510(k) clearance and launched in the U.S. in September.

      For Launch Outside the U.S. Only
      • CORNERSTONE-SR® Ti- Coated Anatomical Cervical Cagehas received a CE Mark (Conformité Européenne) and launched in Western Europe in July.  This system is not for use in the United States or its territories.

      Indications for these devices are as follows:
      • CAPSTONE PTC™ Spinal System and CLYDESDALE PTC™ Spinal System are indicated for interbody fusion with autogenous bone graft in patients with Degenerative Disc Disease (DDD) at one or two levels from L2 to S1, for interbody fusions in the lower back or lumbar spine. These devices are intended to be used with supplemental fixation.

      • CORNERSTONE-SR® Ti- Coated Cervical Fusion System is indicated for:
      • degenerative discopathy and instability

      • primary surgery for certain progressive degenerative discopathies or extensive anterior decompression

      • revision surgery for failed disc operation, stenosis, and/or post-operative instability

      • pseudarthrosis or failed arthrodesis

      • The ANATOMIC PEEK PTC Cervical Fusion System is indicated for cervical interbody fusion procedures in skeletally mature patients with cervical disc disease at one level from the C2-C3 disc to the C7-T1 disc. The ANATOMIC PEEK PTC device is to be used with supplemental fixation and autogenous bone graft and/or allogenic bone graft comprised of cancellous and/or corticocancellous bone graft.

      The CAPSTONE PTC™ Spinal System, the CLYDESDALE PTC™ Spinal System, CORNERSTONE-SR® Ti-Coated Cervical Fusion System, and the ANATOMIC PEEK PTC Cervical Fusion System incorporate the technology of Gary K. Michelson, M.D.