TIDMSN.
RNS Number : 2004U
Smith & Nephew Plc
22 November 2023
Smith+Nephew acquires novel cartilage regeneration technology
for sports medicine knee repair
22 November 2023
Smith+Nephew (LSE:SN, NYSE:SNN), the global medical technology
company, today announces that it has entered into a definitive
agreement to acquire CartiHeal, developer of Agili-C, a novel
sports medicine technology for cartilage regeneration in the knee.
Under the terms of the agreement, Smith+Nephew will pay an initial
cash consideration of $180 million at closing, and up to a further
$150 million contingent on financial performance.
Agili-C is an off-the-shelf one-step treatment for osteochondral
(bone and cartilage) lesions with a broader indication than
existing treatments. It is indicated to treat a wide patient
population, including those with lesions in knees with mild to
moderate osteoarthritis , a previously unaddressed condition, as
well as the approximately 700,000 patients(1) that receive
cartilage repair annually in the US.
"The acquisition of this disruptive technology supports our
strategy to invest behind our successful Sports Medicine business",
said Deepak Nath, Chief Executive Officer of Smith+Nephew.
"Agili-C's superior clinical performance makes it highly
complementary to our existing knee repair portfolio and with our
proven commercial expertise in high-growth biologics, we are
confident that we will drive further success with this compelling
treatment option."
Agili-C is a porous, biocompatible, and resorbable scaffold
which promotes natural regeneration of the articular cartilage and
restoration of its underlying subchondral bone. The U.S. Food and
Drug Administration (FDA) granted Agili-C Breakthrough Device
designation status in 2020 and Premarket Approval (PMA) in March
2022. PMA approval was granted based on the results of a two-year
randomised controlled trial (N=251) that confirmed superiority of
Agili-C over current standard of care - microfracture and
debridement for the treatment of knee joint surface lesions,
chondral and osteochondral defects. Study inclusion criteria
included patients with mild and moderate osteoarthritis. At
four-year follow- up the trial continues to show significant
improvement of patient reported outcome scores, low surgical
reintervention, and that the difference in improvement using
Agili-C compared to the standard of care is statistically
significant - offering potential for a new standard of care in
cartilage repair.
"As a leader in sports medicine and with a deep knowledge of
biologics, Smith+Nephew is the ideal new home for Agili-C," said
Nir Altschuler, Chief Executive Officer and Founder of CartiHeal.
"We are excited at the prospect of our technology helping many more
patients overcome knee pain."
"We have shown with REGENETEN that we have the market
development and commercialisation expertise to take novel
technologies and successfully establish a new standard of care,"
said Scott Schaffner, President Sports Medicine, Smith+Nephew.
"Agili-C is the perfect addition to our portfolio and we look
forward to leveraging our expertise to transform cartilage repair
outcomes for patients."
CartiHeal was founded in 2009 as a university spin-out. It
retains a small facility close to Tel Aviv and a sales office in
New Jersey, US. CartiHeal has large quantities of raw material in
the US and, by close of the transaction, will also have ample US
stock to support full commercial launch. All CartiHeal employees
are expected to transfer to Smith+Nephew.
The transaction is expected to close in the first quarter of
2024. Breakeven to trading profit is targeted by 2027 with ROIC to
exceed our WACC by the fifth year. The acquisition will be financed
from existing cash and debt facilities.
Smith+Nephew's Meet the Management investor event on 29 November
2023 will include discussion of this acquisition.
Enquiries
Investors / Analysts
Andrew Swift
Smith+Nephew +44 (0) 1923 477433
Media
Charles Reynolds
Smith+Nephew +44 (0) 1923 477314
Susan Gilchrist / Ayesha Bharmal
Brunswick +44 (0) 20 7404 5959
References
1. Medtech 360, Sports Medicine Devices, Market Analysis, US,
2018, Millennium Research Group, Inc.
About Smith+Nephew
Smith+Nephew is a portfolio medical technology business that
exists to restore people's bodies and their self-belief by using
technology to take the limits off living. We call this purpose
'Life Unlimited'. Our 19,000 employees deliver this mission every
day, making a difference to patients' lives through the excellence
of our product portfolio, and the invention and application of new
technologies across our three global business units of
Orthopaedics, Advanced Wound Management and Sports Medicine &
ENT.
Founded in Hull, UK, in 1856, we now operate in more than 100
countries, and generated annual sales of $5.2 billion in 2022.
Smith+Nephew is a constituent of the FTSE100 (LSE:SN, NYSE:SNN).
The terms 'Group' and 'Smith+Nephew' are used to refer to Smith
& Nephew plc and its consolidated subsidiaries, unless the
context requires otherwise.
For more information about Smith+Nephew, please visit
www.smith-nephew.com and follow us on X , LinkedIn , Instagram or
Facebook .
Forward-looking Statements
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that Smith+Nephew has filed with the U.S. Securities and Exchange
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