BMTI +80% p/m... Wright Medical Group, Inc. and BioMimetic Therapeutics, Inc. Enter into Agreement to Combine Businesses
Tweet Tweet
Wright Medical Group, Inc. (NASDAQ: WMGI) and BioMimetic Therapeutics, Inc. (NASDAQ: BMTI) announced today that
definitive
a
into
entered
have
they
agreement for a business combination of Wright and BioMimetic, both publicly
companies.
Tennessee-based
traded,
Wright is an orthopedics company with a market-leading lower extremities franchise. BioMimetic is focused
developing regenerative medicine
healing
the
promote
to
products
musculoskeletal injuries and diseases with a novel protein therapeutic product, Augment ® Bone Graft, under late stage
replacement
a
as
review
FDA
autologous bone graft in foot and ankle fusions. The transaction will combine BioMimetic’s breakthrough biologics
Wright’s
with
pipeline
and
platform
established sales force and product
growth
accelerate
further
to
portfolio,
opportunities in Wright’s Extremities business.
Under the terms of the agreement, the transaction has a total potential value for BioMimetic shareholders
approximately $380 million, or $12.97 per share, based on Wright’s closing stock price on Friday, November 16, 2012. Each share of BioMimetic common stock will be converted into the right to receive an upfront payment of $1.50 in cash and 0.2482 shares of Wright common stock. The upfront payment values BioMimetic at approximately $190 million, or $6.47 per share, based on Wright’s closing stock price on November 16, 2012. Each BioMimetic share will also receive one tradable Contingent Value Right (CVR), which entitles its holder to receive additional cash payments of up to $6.50 per share, which are payable upon receipt of FDA approval of Augment ® Bone Graft and upon achieving certain revenue milestones.
Any contingent milestone payments will be paid in cash. The CVR payments to BioMimetic shareholders are structured as follows:
$3.50 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
BioMimetic; $1.50 per share upon the achievement of $70 million in trailing twelve month sales
contributed
products
all
for
BioMimetic.
The latter two sales milestone payments cannot be made sooner than 24 and 36 months post-closing of the transaction, respectively.
The transaction is expected to close in the first quarter of 2013 and is subject to customary closing conditions, including BioMimetic shareholder approval.
unanimous
the
received
transaction
approval of the board of directors of both Wright and BioMimetic. In addition, several key shareholders of BioMimetic
of
support
their
evidenced
have
transaction by entering into agreements to vote in favor of the transaction.
Robert Palmisano, President and
Executive Officer of Wright, commented,
transaction
this
believe
“We
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
products
BioMimetic’s
rates.
growth
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
Executive Officer of BioMimetic Therapeutics, added, “BioMimetic
delighted to partner with a company that
building
to
commitment
our
shares
world-class biologics platform.
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
world.”
BioMimetic’s Augment ® product line is based on recombinant human platelet-
(rhPDGF-BB),
factor
growth
derived
synthetic copy of one of the body’s principal healing agents. In May 2011, the
Rehabilitation
and
Orthopaedic
FDA’s
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
hindfoot and
alternative to autograft in
ankle fusions. In January 2012, BioMimetic announced receipt of a post-panel non-approvable letter requesting
a
in
information
additional
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
therapeutic to
protein
proven
clinically
come to the orthopedics market
decade, offering the potential to reinforce surgical bone repair in hindfoot and ankle
which
effectively,
procedures
fusion
translates into an estimated market opportunity believed to be approximately $300 million annually in the
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
ankle
and
hindfoot
for
Zealand
New
fusion indications.
Although Wright cannot finalize
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-
Augment ®
year post-FDA approval of
thereafter.
accretive
and
Graft
Bone
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.
Conference Call and Webcast
Wright Medical will host a conference call today, November 19, 2012, beginning at 10:00 a.m. Central Time (11:00
Eastern Time) to discuss the BioMimetic 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
accessible
and
archived
be
approximately 12 months. The live dial-in number for the call is 800-591-6930 (U.S.) or 617-614-4908 (International). The participant passcode is “Wright.”
