ALPHARETTA, Ga., Dec. 13, 2021 /PRNewswire/ -- Avanos Medical,
Inc. (NYSE: AVNS) today announced it has entered into a definitive
agreement to acquire OrthogenRx, Inc., an emerging leader in
viscosupplementation therapies for the treatment of knee
osteoarthritis (OA) pain, for a total consideration of $160 million. The purchase price consists of
$130 million in cash at closing plus
an additional $30 million in
contingent cash consideration, payable upon the achievement of
growth milestones related to the company's commercial hyaluronic
acid (HA) therapy products, GenVisc® 850 and
TriVisc®.
![(PRNewsfoto/Avanos Medical Inc.) (PRNewsfoto/Avanos Medical Inc.)](https://mma.prnewswire.com/media/713850/Avanos_Logo.jpg)
The treatment of OA knee pain with HA therapy represents a
commercial opportunity of $1 billion
in the U.S. The addition of GenVisc 850 and TriVisc – both approved
by the U.S. Food and Drug Administration and indicated for the
treatment of OA knee pain in patients who have failed to respond
adequately to conservative, non-pharmacologic therapy and simple
analgesics – will complement Avanos' pain portfolio of COOLIEF*
Cooled Radiofrequency treatment for knee OA.
HA injections are a nonsurgical option that clinicians use to
treat millions of patients impacted by pain and sustained
discomfort due to knee OA. These injections can play a key role in
the continuum of care for patients, often providing interim pain
relief before transitioning to the next level of treatment options,
including COOLIEF*.
"The acquisition of OrthogenRx enhances our chronic pain
portfolio by providing continuum of care treatment options for
patients living with knee OA," said Avanos Chief Executive Officer
Joe Woody. "This business is a clear
strategic fit for Avanos, and one that will further strengthen our
relationships with healthcare providers as we seek to become their
preferred partner in treating musculoskeletal pain."
Michael Daley, PhD, and J.
David Owens, OrthogenRx, Inc.
Co-Presidents and Co-Chief Executive Officers, offered the
following comment: "We are extremely proud of our team's
accomplishments, and finding a partner such as Avanos with a
similar culture, dedication and focus on patient care is exciting
and important for OrthogenRx. This is truly a synergistic
integration that creates value for all stakeholders as well as
future opportunities for our existing products and pipeline."
The transaction is expected to close in Q1 2022, subject to
customary closing conditions including clearance under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Avanos will
finance the acquisition through a combination of funds from its
existing credit facility and available cash. The company estimates
that the new business will contribute approximately $65 million in 2022 revenue and will be
immediately accretive to gross and operating margins.
Alston & Bird LLP is serving as legal counsel to Avanos.
Canaccord Genuity LLC is serving as financial advisor to OrthogenRx
and Blank Rome LLP is serving as its legal counsel.
About Avanos Medical:
Avanos Medical, Inc. (NYSE: AVNS) is a medical technology company
focused on delivering clinically superior breakthrough medical
device solutions to improve patients' quality of
life. Headquartered in Alpharetta, Georgia, Avanos is committed to addressing
some of today's most important healthcare needs, such as reducing
the use of opioids while helping patients move from surgery to
recovery. Avanos develops, manufactures and markets its recognized
brands in more than 90 countries. For more information, visit
www.avanos.com and follow Avanos Medical on Twitter
(@AvanosMedical), LinkedIn and Facebook.
About OrthogenRx:
OrthogenRx, Inc. is a
medical device company focused on the development and
commercialization of treatments for knee pain caused by
osteoarthritis (OA). OA is the most common cause of knee pain,
causing sufferers significant pain and disability. OrthogenRx
aspires to provide every patient with the products they need and
assist in getting them back to a life without OA knee pain. Learn
more at www.orthogenrx.com, www.genvisc850.com and
www.trivisc.com.
GenVisc 850 and TriVisc are registered trademarks of OrthogenRx,
Inc.
Note Regarding Forward-Looking Statements
This press
release contains information that includes or is based on
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include all statements that do not relate solely to
historical or current facts, and can generally be identified by the
use of words such as "may," "believe", "will," "expect," "project,"
"estimate," "anticipate," "plan" or "continue" and similar
expressions, among others. The "forward-looking statements"
include, without limitation, statements regarding the acquisition's
impact on the Company's chronic pain portfolio including Company
revenues and gross and operating margin, the timing of the closing,
and the Company's source of funds for the acquisition.
Forward-looking statements are based on the current plans and
expectations of management and are subject to various risks and
uncertainties that could cause our actual results to differ
materially from those expressed or implied in such statements.
Actual results could differ materially from those expected as a
result of a variety of factors, including weakening of economic
conditions that could adversely affect the level of demand for
products; pricing pressures generally, including cost-containment
measures that could adversely affect the price of or demand for
products; shortage in drugs or other disruptions in our supply
chain; changes in foreign exchange markets; legislative and
regulatory actions; changes in reimbursement levels from
third-party payors; product liability claims; and changes in the
competitive environment. Additional information concerning
these and other factors that may impact future results is contained
in the Company's Annual Report on Form 10-K for the year ended
December 31, 2020 and other periodic
reports filed with the Securities and Exchange Commission.
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SOURCE Avanos Medical, Inc.