Smith & Nephew is taking a deeper dive into the regenerative medicine market through its $660 million acquisition of Osiris Therapeutics.
The London-based company said it hopes to close the deal in 2Q19 and made the announcement of the pending merger at the American Academy of Orthopedics Annual Meeting held this week in Las Vegas.
Columbia MD-based Osiris Therapeutics delivered revenue of $102 million for the nine-months ended 30 September 2018, an 18.7% increase over the comparable period in 2017. Revenue was $36.5 million for the three-month period ended 30 September 2018, a 22.4% increase year on year. Osiris is expected to publish its 4Q18 and Full Year 2018 results on Friday.
Osiris' principal products, Grafix and Stravix, accounted for more than 70% of revenue in the first nine months of 2018, and drove the majority of growth. S&N executives said that they expect the two products to continue to deliver strong double-digit growth into the medium term. Both Grafix and Stravix participate in the US skin substitute market, which is currently worth $900 million per annum and growing at 7% annually.
“This is a deal that allows us access to the U.S. market due to the kind of products they are and the manufacturing and processing methods,” Namal Nawana, CEO of S&N, said during a Tuesday call with investors and analysts. “The U.S. market is growing rapidly and we have a leading position in the allograft segment. We’re really pleased with the long-term growth prospects of the market segment.”
In a release, Simon Fraser, President, Advanced Wound Management at Smith & Nephew, said: "Grafix offers a compelling new option for managing hard to heal wounds and Stravix expands our tissue repair portfolio. We will drive synergies across products from common call points and increased access to our wider customer base."
S&N’s play for Osiris Therapeutics comes on the heels of rumors that it was interested in acquiring NuVasive for $3 billion. However, neither company commented on the validity of the rumor.