UPDATED Oct. 2, 2019, with details on the agreement.
The deal calls for Stryker to pay $14 million up front for the Conformis patient-specific instrumentation, which uses CT scans to create customized, single-use instrumentation for knee replacement procedures. Conformis said the deal includes Stryker’s Triathlon total knee.
Another $16 million is on the table in milestones for sales, licensing and development of the Conformis tech Stryker implants; the deal also includes a long-term distribution agreement, Billerica, Mass.-based Conformis said.
“Innovations in healthcare are being driven by advancements in personalized medicine,” president & CEO Mark Augusti said in prepared remarks. “Conformis is excited to partner with Stryker – a leader in orthopedic surgical innovation – to further expand CT-based solutions to the market. Such solutions are the future of healthcare, enabling surgeons to provide personalized care based on a patient’s unique anatomy.”
Under the terms of the deal, Conformis is barred from developing the technology for off-the-shelf implants for other orthopedics companies until Jan. 1, 2032. Stryker’s use of the Conformis technology is limited to its off-the-shelf knee implants including Triathlon. The assets in the deal include software code and manufacturing documents and half ownership of the copyrights and know-how contained in them, according to a regulatory filing.
The $16 million in milestones includes an aggregate $5 million within 30 days of Stryker receiving the first prototype and Conformis freezing the design. The licensing provision calls for Conformis to grant Stryker an exclusive, transferable, royalty-bearing, sublicensable, worldwide license; within 30 days of 510(k) clearance from the FDA, Stryker will owe another $11 million milestone payment.
The deal also includes provisions making Stryker the exclusive distributor of the co-developed product for five years, with Conformis as its exclusive manufacturer and one-year extension options through 2031.