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Ex-dividend $1.50 (12/12/18)
WRIGHT MEDICAL GROUP NV (WMGIZ)
Last Trade [tick] 0.0300 [-]
Volume 216,384
Net Change -0.0200
Net Change % -40.0%
52 Week High 1.7399 on 01/02/2018
52 Week Low 0.0200 on 12/12/2018
Ex-dividend 12/12/18
Wright Medical Group N.V. Announces Payment Date and Record Date for CVR Product Sales Milestone Payment (12/10/18)
AMSTERDAM, The Netherlands, Dec. 10, 2018 (GLOBE NEWSWIRE) -- Wright Medical Group N.V. (NASDAQ:WMGI) today announced a contingent value right (CVR) milestone payment of US $1.50 per contingent value right (CVR) payable to CVR holders of record at the close of business on December 5, 2018. The payment date to the Trustee for this milestone payment is December 10, 2018. The CVRs trade on the NASDAQ under the symbol WMGIZ. Nasdaq will establish the ex-dividend date for the payment.
This payment is being made as a result of the achievement of Product Sales Milestone #1, as defined in the Contingent Value Rights Agreement dated as of March 1, 2013 between Wright Medical Group, Inc. and American Stock Transfer & Trust Company, LLC, which agreement was entered into in connection with Wright’s acquisition of BioMimetic Therapeutics, Inc.
About Wright Medical Group N.V.
Wright Medical Group N.V. is a global medical device company focused on extremities and biologics products. The company is committed to delivering innovative, value-added solutions improving the quality of life for patients worldwide. Wright is a recognized leader of surgical solutions for the upper extremities (shoulder, elbow, wrist and hand), lower extremities (foot and ankle) and biologics markets, three of the fastest growing segments in orthopaedics. For more information about Wright, visit www.wright.com.
™ and ® denote trademarks and registered trademarks of Wright Medical Group N.V. or its affiliates, registered as indicated in the United States, and in other countries. All other trademarks and trade names referred to in this release are the property of their respective owners.
https://www.globenewswire.com/news-release/2018/12/10/1664791/0/en/Wright-Medical-Group-N-V-Announces-Payment-Date-and-Record-Date-for-CVR-Product-Sales-Milestone-Payment.html
Ex-dividend date for this?
Sales for AUGMENT® Bone Graft reached $40 million for the 12 months ended 11/28/18, which will result in the $42 million payment during Q4 2018.
Further, if, prior to 3/01/19, sales of AUGMENT® Bone Graft reach $70 million over 12 consecutive months, an additional cash payment would be required at $1.50 per share, or $42 million.
https://www.sec.gov/Archives/edgar/data/1492658/000149265818000050/a10qwmgi-9302018.htm
Thank you very much I'm thinking about buying some what do you think
WMGIZ is not a "stock".
It is a Contingent Value Right.
To learn more, read this:
http://www.investopedia.com/terms/c/cvr.asp
Holders just received $3.50 per CVR.
Wright Medical Group, Inc. Announces FDA Approval for AUGMENT(R) Bone Graft (9/01/15)
First Clinically Proven, Cost-Effective Alternative to Autograft for Ankle and/or Hindfoot Fusion Indications
Company Can Now Initiate Commercial Sale and Distribution of AUGMENT® Bone Graft in the U.S.
MEMPHIS, Tenn., Sept. 01, 2015 (GLOBE NEWSWIRE) -- Wright Medical Group, Inc. (NASDAQ:WMGI) today announced that its BioMimetic subsidiary has received an approval order from the U.S. Food and Drug Administration (FDA) for its Premarket Approval Application (PMA) for AUGMENT® Bone Graft. The approval order indicates that FDA determined that AUGMENT® Bone Graft is safe and effective as an alternative to autograft for ankle and/or hindfoot fusion indications. Wright can now initiate commercial sale and distribution of AUGMENT® Bone Graft in the U.S.
A document accompanying this release is available at: http://www.globenewswire.com/NewsRoom/AttachmentNg/6a4c564e-1325-4eaa-adbc-bd097f23fe47
Robert Palmisano, president and chief executive officer, stated, “The FDA approval of AUGMENT marks a capstone achievement that demonstrates the strength of our science and provides a breakthrough therapeutic option as an alternative to autograft in ankle and hindfoot fusion procedures. We will begin commercial sale and distribution of AUGMENT in the U.S. and believe this product, as well as the PDGF technology platform, will be important drivers of the long-term growth of our business for years to come.”
The Company continues to anticipate AUGMENT® revenue in the U.S. to be in the range of $10 million to $12 million in the first seven to eight months post-approval. The revenue ramp is expected to build gradually during the first six months following the launch of the product as launch activities, such as review by hospital value analysis committees and physician education, are initiated. The company expects to begin selling product in the U.S. in the next several weeks once inventory is moved into its U.S. distribution network.
Palmisano continued, “This approval also underscores the significant effort and perseverance from our clinical trial investigators and Wright’s clinical, regulatory and legal teams to bring the product to market. This success can be attributed to everyone involved in the clinical trial, especially the study investigators and coordinators; our R&D, regulatory and clinical teams; our partners and suppliers; and most importantly, the patients who participated in the landmark prospective, randomized study comparing AUGMENT Bone Graft to autograft.”
Dr. Christopher DiGiovanni, lead U.S. investigator for the AUGMENT® Bone Graft North American pivotal trial and Chief of the Foot and Ankle Service in the Department of Orthopaedic Surgery at Massachusetts General Hospital, Harvard Medical School, said, “The FDA approval of AUGMENT provides a valuable new therapeutic healing option as an alternative to autograft in ankle and/or hindfoot fusion procedures, which is especially important since the outcomes of these interventions can at times be complicated by delayed union or non-union. This approval is based on strong clinical data showing that AUGMENT offers clear patient benefit by enabling a healing rate and safety profile equivalent to autogenous bone graft--while simultaneously avoiding the additional surgery required to harvest autograft bone graft tissue that can result in site-specific complications and/or prolonged harvest site pain in some patients.”
AUGMENT® Bone Graft is the first clinically proven protein therapeutic to come to the U.S. orthopaedics market in over a decade, offering an alternative to autograft in ankle and/or hindfoot fusion procedures, which translates into an estimated market opportunity of approximately $300 million in the U.S. The combination of two components, recombinant human Platelet-Derived Growth Factor (rhPDGF) and Beta-tricalcium phosphate (Beta-TCP), is key to the product’s activities. rhPDGF provides a biological stimulus for the recruitment and proliferation of cells, including osteoblasts, which are responsible for the formation of bone, while Beta-TCP provides a framework or scaffold for new bone growth to occur. As an FDA-approved alternative to autograft in ankle and/or hindfoot fusion procedures, AUGMENT® offers a clear patient benefit by avoiding secondary surgical sites for the harvest of autograft tissue, which can result in prolonged harvest site pain in some patients.
An investor presentation is available on Wright’s website at www.wmt.com in the investor relations section.
Internet Posting of Information
Wright routinely posts information that may be important to investors in the “Investor Relations” section of its website at www.wmt.com. Wright encourages investors and potential investors to consult its website regularly for important information.
About Wright Medical
Wright Medical Group, Inc. is a specialty orthopaedic company that provides extremity and biologic solutions that enable clinicians to alleviate pain and restore their patients’ lifestyles. The company is the recognized leader of surgical solutions for the foot and ankle market, one of the fastest growing segments in medical technology, and markets its products in over 60 countries worldwide. For more information about Wright Medical, visit www.wmt.com.
http://globenewswire.com/news-release/2015/09/01/765328/0/en/Wright-Medical-Group-Inc-Announces-FDA-Approval-for-AUGMENT-R-Bone-Graft.html
Congrat$ to long$!
.90 is not too bad at all (my cost basis was .30)
GLTA EOM
And I am "GUESSING" that . . . it goes up . . . A LOT . . . TODAY . . . on news that the FDA just APPROVED "AUGMENT."
Cha-ching!
But who am I to say what's up?
WMGIZ??
Now that's wussup!
And am now LMFAO! All the way to the bank. Bought WMGIZ at prices between 90 and 91 cents and sold enough today to get back all of my original capital, and then some. Still holding LOT$ and LOT$ to go along for the "free ride."
All in all, a Red Letter Day in the Merchant of Death household.
MoD
Ps: to answer your question, the year is 2015.
Update on Augment® Bone Graft (7/29/15)
The Company previously announced that an Augment® Bone Graft vendor received a Form 483 at completion of an FDA pre-approval facility inspection in January of 2015. Late in March 2015, the vendor was notified by the FDA that its facility would be reinspected and must be in substantial compliance with the current Good Manufacturing Practice (cGMP) regulation as a condition for approval of the Augment® Bone Graft Premarket Approval Application (PMA). The vendor’s facility was subsequently reinspected by the FDA in June of 2015, and the vendor received a Form 483 at the completion of the inspection, which included seven observations. None of the observations was specifically related to Augment® Bone Graft. The vendor has submitted its response to the FDA. The Company worked closely with the vendor to address the observations and prepare its response. The FDA has not informed the Company if a reinspection of the vendor’s facility will be required. Assuming no additional reinspection is required, the Company anticipates final approval of Augment® Bone Graft in the second half of 2015.
http://www.sec.gov/Archives/edgar/data/1137861/000113786115000025/wmgi6302015exhibit991press.htm
Augment US sales estimated between $10 and $12 million during the first seven to eight months post-approval.
I agree, the longer it takes for Augment to get approval, the less chance of obtaining the revenue milestone(s). I think $5.00 is still in the cards, but the market has to ask are current values worth the risk? It could take several years to obtain the milestone payment, is the risk worth a possible 20% ROI? In addition, CVR payouts are also potentially subject to withholding. IMHO, GLTA
WMGIZ most likely going on sale as a result.
Update on Augment® Bone Graft (4/29/15)
The Company previously announced that an Augment® Bone Graft vendor received a Form 483 at completion of an FDA pre-approval facility inspection, which occurred in January of 2015. Late in March 2015, the vendor was notified by the FDA that its facility will be reinspected and must be in substantial compliance with the current Good Manufacturing Practice (cGMP) regulation as a condition for approval of the Augment® Bone Graft Premarket Approval Application (PMA). The Company has notified FDA that the vendor is prepared for the reinspection and asked that it be scheduled on or after May 4, 2015. Assuming a satisfactory inspection result, the Company believes final approval of Augment® Bone Graft now appears more likely in the second half of 2015.
The FDA will likely require further action from the company on at least one or more issues in the form 483 response, resulting in further delay of Augment approval. Odds are WMGIZ will head lower, all imo.
Bob Palmisano - President and CEO
"The inspection that occurred at the vendor had 13 observations."
Source: http://seekingalpha.com/article/2951646-wright-medical-groups-wmgi-ceo-robert-palmisano-on-q4-2014-results-earnings-call-transcript?part=single
It appears that there is risk of WMGIZ heading even lower based on your comments.
Can you please provide a source for this information?
WMGIZ is trending lower as a result of the FDA finding a total of THIRTEEN Observations in the form 483. This seems like a big number of issues found in the inspection, and it is likely that any one of those observations could result in follow-up responses required from the FDA, causing further delay, decreasing the chances of revenue milestones being met in the future, imo.
CEO Robert Palmisano mentioned a $100 million payment to CVR holders upon FDA approval for Augment during the conference call.
WMGIZ CVR buyback is a good possibility, imo.
$533 million proceeds
- $51 million transaction expenses
- $292 million notes repurchase
Balance = $190 million
Total WMGIZ CVR value @ $6.50 = $190 million
"The Company estimates that the net proceeds of the offering will be approximately $533 million (or $613 million if the initial purchasers exercise their over-allotment option in full), after deducting the initial purchasers' discounts and commissions and estimated offering expenses. The Company expects to use approximately $51 million of the net proceeds from the offering (or $58 million if the initial purchasers exercise their over-allotment option in full) to pay the cost of the cash convertible note hedge transactions (after such cost is partially offset by the proceeds to the Company from the sale of the warrants). The Company also expects to use approximately $292 million of the net proceeds of the offering to repurchase approximately $240 million aggregate principal amount of the Company's outstanding 2.00% cash convertible senior notes due 2017 in privately negotiated transactions and the remaining net proceeds from the offering for general corporate purposes, including possible acquisitions."
Source: http://www.marketwatch.com/story/wright-medical-group-inc-prices-550-million-cash-convertible-senior-notes-offering-2015-02-10
I agree, the CVR's represent tremendous upside potential. We have over 4 more years to achieve the revenue milestones. Likely they will both be met, imo.
The merger with Tornier is hung up on the FTC in regards to lower extremities, maybe they need to tender the cvr's in order for the merger to proceed? The latest $400 million offering would definitely provide the means to do so.
"Wright is required to provide a product sales statement to the trustee that includes a calculation of the aggregate product sales for the Products during that calendar month and the 11 immediately preceding calendar months."
Source: http://www.nasdaqtrader.com/content/newsalerts/2013/infocircular/WMGIZcircular.pdf
I have been wondering about total those Biomimetic sales figures.
It would be cheaper if the Board just gave management the authorization to buy CVRs in the open market. File the press release and then start buying as soon as word is officially out. ;o)
I am not likely to tender unless the offer would be at the higher range you mentioned. I would then take their cash and buy back on any price decay once the offer closed.
Earnings release (Annual Report) and conference call is scheduled for February 25th. The tender offer should be priced somewhere in the range of $5.75 to $6.00, as the revenue milestones are based upon GLOBAL sales of Biomimetic products, imo.
"“Product” means any of the following medical products: (a) AUGMENT Bone Graft; (b) AUGMENT Injectable; (c) AUGMATRIX Bone Graft; (d) AUGMENT Chronic Tendinopathy; or (e) any other medical product that the Company, in its sole discretion, elects to offer for sale in any jurisdiction and that: (i) contains recombinant human platelet-derived growth factor BB; and (ii) is covered by patents or utilizes proprietary know-how that was owned or controlled by Achilles immediately prior to the execution of this CVR Agreement."
Source: http://www.lawinsider.com/contracts/5JXznltiLGu57a6ucWWJPJ/wright-medical-group-inc/contingent-value-rights-agreement/2013-03-01
The CVR Agreement does not prohibit Wright or any of its subsidiaries or affiliates from acquiring the CVRs, whether in open market transactions, private transactions or otherwise. However, prior to any acquisition of CVRs, Wright must publicly disclose the amount of CVRs which it has been authorized to acquire and Wright must report in each of its annual and quarterly reports the amount of CVRs it has been authorized to acquire as well as the amount of CVRs it has acquired as of the end of the quarterly or annual period reported in such quarterly or annual report.
Source: http://www.nasdaqtrader.com/content/newsalerts/2013/infocircular/WMGIZcircular.pdf
Possible.
Since the first CVR payment of $3.50 will most likely occur in Q2 or probably no later than early Q3, now may just be the right time.
I could envision a tender offer coming in below the $6.50 maximum payout, somewhere between $5.00 and $5.25 per CVR.
Potential CVR buyback of all outstanding shares of WMGIZ from Wright Medical prior to merger with Tornier, imo. 28.1 million contingent value rights (CVRs) were issued, and at $6.50 is approximately $190 million.
02/09/15 Wright Medical Group, Inc. Announces Proposed Private Placement of Cash Convertible Senior Notes
"The Company estimates that the net proceeds of the offering will be approximately $389 million (or $447 million if the initial purchasers' option to purchase additional notes is exercised in full), after deducting the initial purchasers' discounts and commissions and estimated offering expenses. The Company expects to use a portion of the net proceeds from the offering to pay the cost of the cash convertible note hedge transactions (after such cost is partially offset by the proceeds to the Company from the sale of the warrants). The Company intends to use the remaining net proceeds from the offering for general corporate purposes, including possible acquisitions and to repay up to approximately $250 million aggregate principal amount of the Company's outstanding indebtedness in privately negotiated transactions."
Source: http://www.marketwatch.com/story/wright-medical-group-inc-announces-proposed-private-placement-of-cash-convertible-senior-notes-2015-02-09
Wright Medical Group, Inc. Announces Receipt of Second Request From Federal Trade Commission Regarding Proposed Merger With Tornier N.V. (2/03/15)
Also Provides Update on Pre-Approval Vendor Inspection by FDA for Augment(R) Bone Graft
MEMPHIS, Tenn., Feb. 2, 2015 (GLOBE NEWSWIRE) -- Wright Medical Group, Inc. (Nasdaq:WMGI) today announced that on January 28, 2015 it received from the Federal Trade Commission ("FTC") a Request for Additional Information and Documentary Material (commonly known as a "Second Request") in connection with its proposed merger with Tornier N.V. Wright also announced that the previously disclosed pending pre-approval inspection of an Augment Bone Graft vendor had concluded and resulted in the issuance of a Form 483 containing certain observations to which the vendor has already responded.
Update on Hart-Scott-Rodino Review Process for Proposed Merger with Tornier N.V.
On January 28, 2015, Wright received a Second Request in connection with the proposed merger with Tornier. Issuance of the Second Request extends the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, until 30 days after both parties have substantially complied with the Second Request, unless that period is extended voluntarily by the parties or terminated sooner by the FTC. The Company intends to cooperate fully with the FTC.
All product lines identified in the Second Request are lower extremity products. Tornier has indicated that, for the period ended September 30, 2014, its lower extremity product lines identified in the Second Request accounted for, in the aggregate, global revenue of approximately $21 million, and U.S. revenue of approximately $14.9 million, which is less than the $15 million U.S. revenue threshold identified in Section 6.05(e) of the merger agreement. The Company continues to believe that, whatever the resolution of the Second Request, the economics and strategic rationale of the transaction will not materially be affected, and the transaction will close. From a timing standpoint, the Company believes a second quarter 2015 closing is still possible, but is now a best-case scenario. In addition to obtaining FTC clearance, the proposed transaction remains subject to customary closing conditions, including approval by both Wright and Tornier shareholders.
Robert Palmisano, president and chief executive officer, stated, "We just received the Second Request and are evaluating our options. We will continue to work cooperatively with the FTC to resolve this as quickly as possible. Whatever the final resolution, we do not expect it to have a material impact on the strategic rationale or economics of the proposed merger, and we remain firmly committed to the transaction."
Update on Augment Pre-Approval Inspection
Wright also announced that one of its vendors received a Form 483 at completion of a recent FDA pre-approval inspection for Augment® Bone Graft. The 483 cited several observations. The vendor has submitted a full response to FDA that the vendor and the Company believe will satisfactorily address the FDA's observations. Based on this, Wright continues to anticipate final approval of Augment® Bone Graft in the first half of 2015 but believes a first quarter approval is unlikely.
Internet Posting of Information
Wright routinely posts information that may be important to investors in the "Investor Relations" section of its website at www.wmt.com. The Company encourages investors and potential investors to consult our website regularly for important information about us.
About Wright Medical
Wright Medical Group, Inc. is a specialty orthopaedic company that provides extremity and biologic solutions that enable clinicians to alleviate pain and restore their patients' lifestyles. The company is the recognized leader of surgical solutions for the foot and ankle market, one of the fastest growing segments in medical technology, and markets its products in over 60 countries worldwide. For more information about Wright Medical, visit www.wmt.com
http://globenewswire.com/news-release/2015/02/02/702208/10118133/en/Wright-Medical-Group-Inc-Announces-Receipt-of-Second-Request-From-Federal-Trade-Commission-Regarding-Proposed-Merger-With-Tornier-N-V.html
Update on Augment Pre-Approval Inspection
Wright also announced that one of its vendors received a Form 483 at completion of a recent FDA pre-approval inspection for Augment® Bone Graft. The 483 cited several observations. The vendor has submitted a full response to FDA that the vendor and the Company believe will satisfactorily address the FDA's observations. Based on this, Wright continues to anticipate final approval of Augment® Bone Graft in the first half of 2015 but believes a first quarter approval is unlikely.
"I am also pleased to report that of the two pre-approval facility inspections the FDA indicated were required for final approval of AUGMENT Bone Graft, one has been completed with no 483 observations cited by the inspectors, and the other is in progress. Although final audit reports are still pending, based on the information we have today, final FDA approval for AUGMENT Bone Graft could potentially come as early as late first quarter of 2015"
Source: http://www.sec.gov/Archives/edgar/data/1137861/000113786115000002/wmgi1122015exhibit991press.htm
Company expects $300M market potential in the US and $1B+ market potential in the US for future uses of Augment product line.
Source: http://services.corporate-ir.net/SEC.Enhanced/SecCapsule.aspx?c=129751&fid=9848248 (Page 16)
STRONG BUY, imho.
Chris DeMuth, Jr. Positions For 2015: Banking M&A, Milestone Payments, Litigation Results (12/22/14)
http://seekingalpha.com/article/2773105-chris-demuth-jr-positions-for-2015-banking-m-and-a-milestone-payments-litigation-results
Liquids that grow bone
Liquids that grow bone in humans? Sounds crazy but they are now commonly used in all sorts of Orthopedic applications. In addition, two weeks ago the FDA approved another product called Augment from Biomimetics (http://www.biomimetics.com/). Biomimetics was purchased by Wright medical in 2013.
Here is a little history. The “gold standard” in Orthopedics has long been bone graft harvested from the patient’s Iliac crest. The Iliac Crest is the top of the Illium. It is part of the pelvic bone that you can feel along your waist line. To harvest the graft the surgeon would make an incision over the bone and cut into the illium. Then scoop out bone to be used during the procedure.
Often the patients would complain that the graft sight was more painful than the surgery itself. Complications associated with this procedure include infections and continued pain. This was a problem that really needed a modern solution. Then in 2001 and 2002, the FDA approved the first liquid proteins for human use.
They were BMP-7 (Stryker) and BMP-2 (Medtronic) respectively. These BMP’s or “bone morphogenic proteins” trigger the body to grow bone where it is needed when implanted at the time of surgery. BMP-2 marketed under the brand name “Infuse” was a blockbuster product that quickly achieved $1 Billion in sales within a few years. Conversely, BMP-7 marketed under the brand name OP-1 struggled with a reduced use labeling from the FDA. It was sold off to Olympus Biotech and eventually they stopped producing it all together and is no longer available.
So the recent approval of Augment is the first new bone growing liquid approved in years. However, it too had a bumpy road getting through the FDA. After an extensive, expensive but well done study, the product was recommended by the Orthopedic panel that precedes the FDA approval. Typically, this means you are in! During this time, Medtronic was coming under fire for possibly hiding the cancer risk associate with Infuse during their trial.
This set off alarms at the FDA, so they were very careful to review this part of the Augment study with extra scrutiny. They decided that the product needed additional study and stunned Biomimetics with a “not approvable” decision.
During the run up to the FDA decision Biomimetics received an offer from Wright Medical to be purchased. This offered the insiders some hedge against the FDA risk. Wright offered the company $380 million, or $12.97 per share. However, the shareholders had to wait for half of their money.
They received an upfront payment of $6.47 per share. In addition, each BioMimetic shareholder received shares in a new tracking stock ticker WMGIZ which entitled its holder to receive additional cash payments of up to $6.50 per share, which would be payable upon receipt of FDA approval of Augment® Bone Graft and upon achieving certain revenue milestones. The payments were structured as follows:
$3.50 would be paid out per share upon FDA approval of Augment® Bone Graft;
$1.50 per share upon the achievement of $40 million in trailing twelve month sales for all products contributed by BioMimetic;
$1.50 per share upon the achievement of $70 million in trailing twelve month sales for all products contributed by BioMimetic.
On the day the FDA reached it’s decision the stock dropped from around $3 per share (shareholders believe the approval was coming) to near zero as everyone rushed to sell their shares. It would appear they were done. Or were they?
Wright medical is a big company with deep pockets. They decided to retrench with the FDA and asked them to review the data again. They felt they could address the FDA’s concerns without doing another big study. After trading at 20 cents or so from August of 2013 to March of 2014, the FDA announced they would give Augment one more look before sending them back to a clinical trial.
The stock jumped 200% on the day this was announced and continued to rise over the next few months. Investors speculated that they just might pull it off even though an FDA reversal had only occurred a few times before in its history. On October 27th, the FDA approved Augment for use. The stock, trading around $1.88 per share shot up to $4.50.
On the same day as the approval, Wright agreed to be sold to Tornier for $3 billion. Assuming the product is as good as the study suggests the tracking stock will finally top out at $6.5 as the final milestone payments are paid out.
An amazing story that ends well for shareholders and I believe patients too. These liquids are a vast improvement for those undergoing surgery that requires a bone graft procedure. For once it seems that everyone wins.
Source: http://www.innov8med.com/liquids-that-grow-bone/
Switching now to last week's positive news regarding the receipt of an approval of letter for Augment Bone Graft. This major milestone paves the way for ultimate commercialization in the U.S. for foot and ankle or hindfoot fusion procedures, and it further underscores our strength in Biologics. Our focus now is on completing the requirements outlined in the approval of letter and bringing Augment Bone Graft to the U.S. market. Final approval was subject to customary preapproval facilities inspections, which we expect to be completed in the December to January time frame. Over the next few months, we will also train our U.S. foot and ankle sales organization in preparation for U.S. commercialization.
Although the exact timing of the Augment launch is not known, a conservative time frame is the first half of 2015, assuming satisfactory approval -- preapproval inspection activity. We expect to be ready to launch Augment in the U.S. immediately upon receipt of the final approval order from the FDA.
We agreed with the FDA on 2 postapproval studies: one, is a fairly typical 24-month conditions of actual use study, which follows the result of surgeons who did not participate in the original pivotal trial; and other -- and the other is a onetime 5-year evaluation of certain number of pivotal study patients. Since virtually, all of the -- those pivotal study trial patients are now 5 years postsurgery, this is not owners. I believe Augment will become a valuable new therapeutic option as an alternative to order graph and ankle and hindfoot fusion procedures, especially as it can eliminate potential complications, morbidity and pain associated with order graph harvest. In addition, Augment provides a platform technology for future new product development, particularly in various upper extremity areas. We look forward to addressing that -- these with additional clinical studies.
I think that we've -- since we announced that we've gotten this approval letter, we've gotten tremendous response from physician community that they just can't wait to get their hands on it, and we just have to kind of like hold them back right now until we can actually get it approved into market.
Brad Mas - Needham & Company, LLC, Research Division
Great. And then just one last quick one. I'm wondering if you guys have any plans to begin additional trials for the injectable form of Augment.
Robert J. Palmisano - Chief Executive Officer, President and Director
Yes. We have an idea on that, and I think that some work has begun on that -- had begun on that, and then we'll continue. As I said in my prepared remarks is that we look -- we see this as a platform technology. And we have other -- we have clinical work ahead of us to expand out of the -- where we're headed in hindfoot and new foot infusions. But we think it's appropriate in different areas. We -- I would say, particularly, in upper extremity. We will -- so we will be doing clinical work starting, I think, sometime in 2015 on other indications. We have -- now with the merger with Tornier, we have a large upper extremities sales force that, hopefully, we can provide them with a terrific biologic for that area as well.
Source: http://seekingalpha.com/article/2646295-wright-medical-groups-wmgi-ceo-robert-palmisano-on-q3-2014-results-earnings-call-transcript
Our initial clinical development program for Augment Injectable has focused on securing regulatory approval for open indications in the United States and in several markets outside the U.S. Recently, we have focused our efforts on securing FDA approval of Augment. The amount of time and cost to complete the Augment Injectable project depends upon the nature of the approval we ultimately receive for Augment, but we currently estimate it could take one to three years.
Our international biologics sales increased 24% as the result of a 49% increase in Asia as the result of the addition of a new distribution partner in China in the second quarter of 2013, and a 19% increase of sales in Australia, primarily related to sales of Augment® Bone Graft acquired from the BioMimetic acquisition in the first quarter of 2013
On October 27, 2014, we received an Approvable Letter from the U.S. Food & Drug Administration (FDA) for our Premarket Approval Application (PMA) for Augment® Bone Graft. The approvable letter indicates the 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. We currently anticipate that we will be able to sell Augment® Bone Graft in the United States beginning in the first half of 2015.
On October 27, 2014, we announced that we had received an Approvable Letter from the U.S. Food and Drug Administration (FDA) for our Premarket Approval Application (PMA) for Augment® Bone Graft. Following this announcement, the fair value of the CVR's increased significantly and traded at an average value of approximately $125 million in the four days following announcement. Approximately $98 million of the liability associated with the CVR's will be payable shortly after receipt of final approval from the FDA for Augment® bone graft.
Source: http://www.sec.gov/Archives/edgar/data/1137861/000113786114000051/wmgi930201410q.htm
Milestone payments will be paid 20 business days after achievement.
No benefit for us.
However, buying the CVRs back a discount reduces the liability for a WMGI and its shareholders.
Sanofi did this some time back with GCVRZ.
If Wright buys back the CVR's, is that a benefit to us? What price would they use? Also, I assume the $3.50 first Milestone payment is already baked into the CVR price today..right? Thanks in advance for your response. I can't find much info other than the basics about this
A tender offer would make a great deal of sense.
Great thank you! Hopefully it is a relatively speedy process with the FDA at this point moving forward. Odds are Wright management will likely buyback the outstanding CVRS prior to the upcoming merger with Tornier.
Final approval is subject to customary preapproval inspections.
This information was provided not only in the presentation but also discussed at some point during the C-call. However, no estimates were mentioned.
566k shares traded so far out of 28.1 million outstanding shares of wmgiz. Longs are in control... Management sees $300 million market share in the US ALONE in Augment so both revenue milestones will likely be met with ease now that Augment has achieved FDA approval. I am just curious as to when the Augment $3.50 payout will occur???
WMGIZ opened at $4.90.
Traded as high as $4.93 and as low as $4.65 within first 30 minutes.
At $4.90, it became what is widely-known as a "10-bagger" for me.
FDA approval of Augment® Bone Graft triggers $3.50 payment.
FDA approval of Augment® Bone Graft triggers $3.50 payment.
Wright Announces Receipt of FDA Approvable Letter for Augment® Bone Graft Presentation
http://phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yfFBhcmVudElEPTUxNzMxMjF8Q2hpbGRJRD01NTg1MzM=
Wright Receives Approvable Letter from FDA for Augment® Bone Graft
[...]
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.”
[...]
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.”
Wright Medical Group, Inc. and Tornier N.V. Agree to Merge Creating Premier High-Growth Extremities-Biologics Company (10/27/14)
Combination Will Offer Comprehensive Upper and Lower Extremity Product Portfolio and Broad Global Reach
Further Accelerates Growth Opportunities in Three of the Fastest Growing Areas in Orthopaedics
Adds Significant Scale and Scope to Provide Accelerated Path to Profitability and Stronger Financial Profile
Wright Receives Approvable Letter from FDA for Augment® Bone Graft
MEMPHIS, Tenn. & AMSTERDAM--(BUSINESS WIRE)--Wright Medical Group, Inc. (NASDAQ: WMGI) and Tornier N.V. (NASDAQ: TRNX) announced today that they have entered into a definitive merger agreement under which Wright and Tornier will combine in an all stock transaction with a combined equity value of approximately $3.3 billion.
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 and Tornier 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.
Structure
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.
Wright Announces Third Quarter 2014 Revenue and Updates Revenue Guidance
In a separate press release issued today, Wright also announced third quarter 2014 revenue and updated revenue guidance. Wright plans to report its full third quarter financial results and discuss these results in more detail on its third quarter earnings call, which is currently scheduled for November 5, 2014 at 3:30 p.m. Central Time.
Tornier Announces Third Quarter 2014 Revenue and Updates Revenue Guidance
In a separate press release issued today, Tornier also announced third quarter 2014 revenue and updated revenue guidance. Tornier plans to report its full third quarter financial results and discuss these results in more detail on its third quarter earnings call, which is currently scheduled for November 6, 2014 at 3:30 p.m. Central Time.
Advisors
In connection with this transaction, J.P. Morgan Securities LLC and Perella Weinberg Partners LP are serving as financial advisors to Wright, and Ropes & Gray LLP is serving as its legal advisor. BofA Merrill Lynch is serving as financial advisor to Tornier and Willkie Farr & Gallagher LLP and Oppenheimer Wolff & Donnelly LLP are serving as its legal advisors.
Conference Call and Webcast
Wright and Tornier management will host a conference call today, October 27, 2014, beginning at 4:30 p.m. Central Time (5:30 p.m. Eastern Time) to discuss the transaction, followed by a question and answer session.
The conference call will be available to interested parties through a live audio webcast at www.wmt.com, where it will be archived and accessible for approximately 12 months. The live dial-in number for the call is 877-474-9504 (U.S.) or 857-244-7557 (International). The participant passcode is “Wright.”
If you do not have access to the Internet and want to listen to an audio replay of the conference call, dial 888-286-8010 (U.S.) or 617-801-6888 (International) and enter passcode 25400317. The audio replay will be available beginning at 6:30 p.m. Central Time on Monday, October 27, 2014 until Tuesday, November 4, 2014.
About Wright Medical
Wright Medical Group, Inc. is a specialty orthopaedic company that provides extremity and biologic solutions that enable clinicians to alleviate pain and restore their patients’ lifestyles. The company is the recognized leader of surgical solutions for the foot and ankle market, one of the fastest growing segments in medical technology, and markets its products in over 60 countries worldwide. For more information about Wright Medical, visit www.wmt.com.
About Tornier
Tornier is a global medical device company focused on providing solutions to surgeons who treat musculoskeletal injuries and disorders of the shoulder, elbow, wrist, hand, ankle and foot. Tornier’s broad offering of over 95 product lines includes joint replacement, trauma, sports medicine, and biologic products to treat the extremities, as well as joint replacement products for the hip and knee in certain international markets. Since its founding approximately 70 years ago, Tornier’s "Specialists Serving Specialists" philosophy has fostered a tradition of innovation, intense focus on surgeon education, and commitment to advancement of orthopaedic technology stemming from its close collaboration with orthopaedic surgeons and thought leaders throughout the world. For more information regarding Tornier, visit www.tornier.com.
Tornier®, Aequalis®, Aequalis Ascend®, Aequalis Ascend® Flex™ and Salto Talaris® are trademarks of Tornier N.V. and its subsidiaries, registered as indicated in the United States, and in other countries. All other trademarks and trade names referred to in this release are the property of their respective owners.
Note on Non-GAAP Financial Measures
Wright and Tornier use non-GAAP financial measures, including EBITDA, as adjusted. Their respective management teams believe that the presentation of these measures provides useful information to investors and that these measures may assist investors in evaluating their respective company’s operations, period over period. EBITDA is calculated by adding back to net income charges for interest, income taxes and depreciation and amortization expenses. While it is not possible to reconcile the adjusted EBITDA forecast in this release to the nearest metric under U.S. generally accepted accounting principles (GAAP) of the combined business without unreasonable effort, the adjusted EBITDA forecast excludes non-cash stock based compensation expense and non-operating income and expense, as well as the expected impact of such items as transaction and transition costs, impacts from the sale of Wright’s OrthoRecon business and costs associated with distributor conversions and non-competes, all of which may be highly variable, difficult to predict and of a size that could have substantial impact on the combined company’s reported results of operations for a period. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “expect,” “plan,” “could,” “may,” “will,” “believe,” “estimate,” “forecast,” “goal,” “project,” and other words of similar meaning. Forward-looking statements in this press release include, but are not limited to, statements about the benefits of the transaction; potential synergies and cost savings and the timing thereof; future financial and operating results; the expected timing of the completion of the transaction; the combined company’s plans, objectives, expectations and intentions with respect to future operations, products and services, the approvable status and anticipated final PMA approval of Wright’s Augment® Bone Graft product, and the positive effects such final approval is anticipated to have on the combined business. Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others, uncertainties as to the timing of the transaction; uncertainties as to whether Tornier shareholders and Wright shareholders will approve the transaction; the risk that competing offers will be made; the possibility that various closing conditions for the transaction may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction, or the terms of such approval; the effects of disruption from the transaction making it more difficult to maintain relationships with employees, customers, vendors and other business partners; the risk that shareholder litigation in connection with the transaction may result in significant costs of defense, indemnification and liability; other business effects, including the effects of industry, economic or political conditions outside of Wright’s or Tornier’s control; the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses of Wright and Tornier may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; operating costs and business disruption following completion of the transaction, including adverse effects on employee retention and on Wright’s and Tornier’s respective business relationships with third parties; transaction costs; actual or contingent liabilities; the adequacy of the combined company’s capital resources; failure or delay in ultimately obtaining FDA approval of Wright’s Augment® Bone Graft for commercial sale in the United States, failure to achieve the anticipated benefits from approval of Augment® Bone Graft, and the risks identified under the heading “Risk Factors” in Wright’s Annual Report on Form 10-K, filed with the SEC on February 27, 2014, and Tornier’s Annual Report on Form 10-K, filed with the SEC on February 21, 2014, as well as both companies’ subsequent Quarterly Reports on Form 10-Q and other information filed by each company with the SEC. Wright and Tornier caution investors not to place considerable reliance on the forward-looking statements contained in this press release. You are encouraged to read Wright’s and Tornier’s filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this release, and Wright and Tornier undertake no obligation to update or revise any of these statements. Wright’s and Tornier’s businesses are subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.
IMPORTANT ADDITIONAL INFORMATION ABOUT THIS TRANSACTION AND WHERE TO FIND IT
In connection with the proposed merger, Tornier plans to file with the U.S. Securities and Exchange Commission (SEC) a registration statement on Form S-4 that will include a joint proxy statement of Wright and Tornier that also constitutes a prospectus of Tornier. Wright and Tornier will make the joint proxy statement/prospectus available to their respective shareholders. Investors are urged to read the joint proxy statement/prospectus when it becomes available, because it will contain important information. The registration statement, definitive joint proxy statement/prospectus and other documents filed by Tornier and Wright with the SEC will be available free of charge at the SEC’s website (www.sec.gov) and from Tornier and Wright. Requests for copies of the joint proxy statement/prospectus and other documents filed by Wright with the SEC may be made by contacting Julie D. Tracy, Senior Vice President and Chief Communications Officer by phone at (901) 290-5817 or by email at julie.tracy@wmt.com, and request for copies of the joint proxy statement/prospectus and other documents filed by Tornier may be made by contacting Shawn McCormick, Chief Financial Officer by phone at (952) 426-7646 or by email at shawn.mccormick@tornier.com.
Wright, Tornier, their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from Wright’s and Tornier’s respective shareholders in connection with the proposed transaction. Information about the directors and executive officers of Wright and their ownership of Wright stock is set forth in Wright’s annual report on Form 10-K for the fiscal year ended December 31, 2013, which was filed with the SEC on February 24, 2014 and its proxy statement for its 2014 annual meeting of stockholders, which was filed with the SEC on March 31, 2014. Information regarding Tornier’s directors and executive officers is contained in Tornier’s annual report on Form 10-K for the fiscal year ended December 29, 2013, which was filed with the SEC on February 21, 2014, and its proxy statement for its 2014 annual general meeting of shareholders, which was filed with the SEC on May 16, 2014. These documents can be obtained free of charge from the sources indicated above. Certain directors, executive officers and employees of Wright and Tornier may have direct or indirect interest in the transaction due to securities holdings, vesting of equity awards and rights to severance payments. Additional information regarding the participants in the solicitation of Wright and Tornier shareholders will be included in the joint proxy statement/prospectus.
Contacts
Wright Medical Group, Inc.
Julie D. Tracy, 901-290-5817
Chief Communications Officer
julie.tracy@wmt.com
or
Tornier N.V.
Shawn McCormick, 952-426-7646
Chief Financial Officer
shawn.mccormick@tornier.com
http://www.businesswire.com/news/home/20141027006367/en/Wright-Medical-Group-Tornier-N.V.-Agree-Merge#.VE65Zol0yUk
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