Olympus (PINK:OCPNY) said it’s shutting down its U.S. biotech business after failing to "gain the traction necessary to build a broader regenerative medicine portfolio," meaning layoffs for the unit’s 200 workers.
The Japanese tech giant, which paid $60 million to buy the beleaguered OP-1 bone growth putty from Stryker in 2010, said commercial operations and "product availability" will cease May 30. The closures will begin at the Hopkinton, Mass., headquarters, according to a press release.
"This was a very difficult decision and was made only after numerous alternatives for business continuation were identified and exhausted over the past year," Olympus Biotech COO David Renker said in prepared remarks. "This decision was a financial one and is not related to the performance of our OP-1 family of products. We are proud of OP-1’s legacy in the market and its significant contributions to regenerative medicine and the quality of life in patients worldwide."
Olympus also slashed the price on the180,000-square-foot Lebanon, N.H., plant where the OP-1 product is made, acquired along with the product line in December 2010. Olympus wants to be shut of the plant within the next 90 days, according to a press release.
"The value for the manufacturing plant and related assets has been reduced to a nominal value," plant manager and operations vice president Peter Gariepy said in prepared remarks. "We have written down the facility and are pursuing an aggressive sales process to showcase this attractive offer to the life sciences industry."
The OP-1 putty caused a major headache for Stryker (NYSE:SYK) after off-label 4 allegations surfaced in the late 2000s. Federal investigators in Oct. 2009 indicted the company and four managers, charging that they led a 2-year campaign to promote the combined use of separate bone-healing products, each granted a narrow, provisional "humanitarian device exemption" by the FDA.
Combining the treatments and devices – the OP-1 Implant, OP-1 Putty and the bone void filler Calstrux – caused adverse effects in patients ranging from minor irritations to infections requiring follow-up surgeries. Stryker pleaded guilty to off-label marketing and paid the feds $15 million (plus another $1.4 million to Massachusetts) to settle the beef.
