Smith & Nephew (NYSE:SNN) said today that it agreed to pay as much as $210 million for Rotation Medical and its regenerative shoulder repair treatment.
The deal calls for the British orthopedics and wound care giant to pay $125 million in up-front cash, with another $85 million on the line over the next five years in financial milestones.
Plymouth, Minn.-based Rotation’s bioinductive implant is designed to induce new tissue growth after a patient suffers a rotator cuff tendon tear. The device won FDA clearance in March 2014.
“Rotation Medical furthers our strategy to invest in disruptive technologies that accelerate the transformation of Smith & Nephew to higher growth,” outgoing CEO Olivier Bohuon said in prepared remarks. “The Rotation Medical rotator cuff system is an innovative technology serving unmet clinical needs. It is highly complementary to our sports medicine portfolio and provides a compelling new treatment option for our customers.”
“The Rotation Medical bioinductive implant addresses a well-recognized unmet need in the treatment of rotator cuff disease by treating the biology of the tendon. Since first commercialization in 2014, thousands of patients have benefited from the Rotation Medical technology,” added Rotation CEO Martha Shadan. “We are proud of the impact our technology has made in healthcare and are excited by the opportunity to reach many more customers and their patients as an integrated part of Smith & Nephew’s extensive sports medicine portfolio.”
“This is the most innovative product that I have seen in sports surgery in recent years,” Dr. Jeffrey Abrams, of Princeton Orthopedic Associates & Sports Medicine, said in the release. “There have been many improvements in surgical repair, but despite these, in many situations, the quality of the attached tendon is less than optimal. A biological approach to treating rotator cuff disease remains a major priority for surgeons. The Rotation Medical bioinductive implant is a game changer in that it improves tendon quality and thickness. My patient outcomes are impressive. This is an exciting technology that has the potential to change the way we treat rotator cuff tears and reverse the natural progression of the disease.”
Smith & Nephew said it plans to sell the Rotation implant both via its own and Rotation’s sales forces in the U.S. as it prepares to file for CE Mark approval in the European Union. The deal is expected to close late this year, the London-based company said.