TIDMSN.
RNS Number : 6296S
Smith & Nephew Plc
12 March 2019
Smith & Nephew expands in high growth regenerative medicine
market through acquisition of Osiris Therapeutics, Inc
12 March 2019
Smith & Nephew plc (LSE:SN, NYSE:SNN), the global medical
technology business, announces that it has agreed to acquire Osiris
Therapeutics, Inc. (NASDAQ: OSIR), a fast growing company
delivering regenerative medicine products, including skin, bone
graft and articular cartilage substitutes, for $19.00 per share in
cash, representing a total equity value of approximately $660
million.
Namal Nawana, Chief Executive Officer, Smith & Nephew,
said:
"Greater presence in the fast growing regenerative medicine
market enhances our portfolio and will help immediately accelerate
our wound management business as well as provide longer term
innovations in additional channels and indications. We sought out a
fast growing portfolio with strong clinical evidence addressing
critical needs in the marketplace."
Osiris delivered revenue of $102 million for the nine-months
ended 30 September 2018, an 18.7% increase over the comparable
period in 2017. Revenue was $36.5 million for the three-month
period ended 30 September 2018, a 22.4% increase year on year.
Osiris is expected to publish its Fourth Quarter and Full Year 2018
results on 15 March 2019.
Osiris' principal products, Grafix(R) and Stravix(R) , accounted
for more than 70% of revenue in the first nine months of 2018, and
drove the majority of growth. We expect these two products to
continue to deliver strong double-digit growth into the medium
term. Grafix and Stravix participate in the US skin substitute
market, which is currently worth $900 million per annum and growing
at 7% annually(1) .
Skin substitute Grafix is a cryopreserved placental membrane
intended for application directly to acute and chronic wounds,
including wounds with exposed bone and tendon. Grafix is supported
by robust evidence including two randomised controlled trials, six
non-randomised trials and more than 20 peer-reviewed publications
in the last 5 years. In October 2018, Osiris launched Grafix PL
PRIME, a lyopreserved product that can be stored at room
temperature, improving usability for healthcare professionals.
Stravix is a cryopreserved placental tissue used as a surgical
cover or wrap to support soft tissue repair in a wide range of
surgical procedures.
Simon Fraser, President, Advanced Wound Management at Smith
& Nephew, said: "Grafix offers a compelling new option for
managing hard to heal wounds and Stravix expands our tissue repair
portfolio. We will drive synergies across products from common call
points and increased access to our wider customer base."
Osiris also offers BIO(4) (R) bone matrix for bone repair and
Cartiform(R) , an allograft for articular cartilage repair,
products currently exclusively distributed by third parties.
Peter Friedli, Chairman and co-founder of Osiris, said: "I am
immensely proud of the business we have built from our research
into advanced regenerative technologies. Smith & Nephew is the
best new owner to take these products forward, widening access to
more customers and restoring quality of life for more
patients."
Osiris' 360 employees are expected to join Smith & Nephew on
completion.
Transaction details
Under the terms of the transaction, Smith & Nephew will
commence a two-step tender offer to purchase all of the outstanding
shares of Osiris common stock for $19.00 per share in cash.
The purchase price represents a 37% premium over the 90-day
volume weighted average price of Osiris' shares prior to this
announcement.
Peter Friedli has entered into a Tender & Support Agreement
with Smith & Nephew whereby he will commit to tender
approximately 30% of the outstanding shares of Osiris in favour of
the transaction.
The companies expect to close the transaction in the second
quarter of 2019, subject to customary closing conditions, including
relevant antitrust clearances and the tender of a majority of
outstanding shares of Osiris common stock on a fully diluted
basis.
The acquisition will be financed from Smith & Nephew's
existing cash and debt facilities. The transaction is expected to
be accretive to Smith & Nephew's adjusted earnings per share
from 2020. The acquisition is expected to generate a return on
invested capital that exceeds Smith & Nephew's cost of capital
in the third year after closing.
S
Analyst conference call
An analyst conference call to discuss Smith & Nephew's
acquisition of Osiris will be held today, Tuesday 12 March at
2.30pm GMT / 10.30am EST / 7.30am PST. The details can be found on
the Smith & Nephew website at:
http://www.smith-nephew.com/investorpresentations/
Enquiries
Investors
Andrew Swift +44 (0) 20 7960 2285
Smith & Nephew
Media
Charles Reynolds +44 (0) 1923 477314
Smith & Nephew
Ben Atwell/ Andrew Ward +44 (0) 20 3727 1000
FTI Strategic Consulting
References
1. SmartTrak Market Research
About Smith & Nephew
Smith & Nephew is a portfolio medical technology business
with leadership positions in Orthopaedics, Advanced Wound
Management and Sports Medicine. Smith & Nephew has more than
16,000 employees and a presence in more than 100 countries. Annual
sales in 2018 were $4.9 billion. Smith & Nephew is a member of
the FTSE100 (LSE:SN, NYSE:SNN). For more information about Smith
& Nephew, please visit our corporate website
www.smith-nephew.com and follow us on Twitter, LinkedIn or
Facebook.
About Osiris Therapeutics, Inc
Osiris Therapeutics, Inc., based in Columbia, Maryland,
researches, develops, manufactures and commercializes regenerative
medicine products intended to improve the health and lives of
patients and lower overall healthcare costs. It has achieved
commercial success with products in orthopedics, sports medicine
and wound care, including the Grafix product line, Stravix(R) ,
BIO4(R) and Cartiform(R) . It continues to advance its research and
development by focusing on innovation in regenerative medicine,
including the development of bioengineered stem cell and
tissue--based products. Osiris(R), Grafix(R) , GrafixPL(R) ,
GrafixPL PRIME Cartiform(R) , and Prestige Lyotechnologysm are all
its trademarks. BIO(4) (R) is a trademark of Howmedica Osteonics
Corp., a subsidiary of Stryker Corporation. More information can be
found on the Company's website, www.Osiris.com. (OSIR-G)
Cautionary Statement Regarding Forward-looking Statements
This press release contains forward-looking information related
to Smith & Nephew, Osiris and the proposed transaction that
involves substantial risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
by such statements. These forward-looking statements generally
include statements that are predictive in nature and depend upon or
refer to future events or conditions, and include words such as
"believes," "plans," "anticipates," "projects," "estimates,"
"expects," "intends," "strategy," "future," "opportunity," "may,"
"will," "should," "could," "potential," or similar expressions.
Forward-looking statements in this press release include, among
other things, statements about the potential benefits of the
proposed transaction, including expected synergies, the expected
timing of completion of the proposed transaction, anticipated
earnings accretion, as well as Smith & Nephew's plans and
expectations and Osiris' financial condition, results of
operations, products and businesses. Forward-looking statements
involve known and unknown risks, uncertainties and other important
factors that could cause actual results to differ materially from
what is expressed or implied by the statements. These
forward-looking statements may be affected by risks and
uncertainties, including, without limitation, the risk that the
proposed transaction will not close when expected or at all; the
risk that the conditions to the tender offer will not be satisfied
in the anticipated timeframe or at all, including uncertainties as
to how many of Osiris' stockholders will tender their shares in the
tender offer; risks related to the ability to realize the
anticipated benefits of the proposed transaction, including the
possibility that its expected benefits and synergies will not be
realized or will not be realized within the expected time period;
negative effects of the announcement or consummation of the
proposed transaction on the market price of Smith & Nephew
shares and its operating results; the risk that Smith &
Nephew's and Osiris' business will be adversely impacted during the
pendency of the proposed transaction; the risk that the operations
of the two companies will not be integrated successfully; unknown
liabilities; and the risk of litigation and regulatory actions
related to the proposed transaction. Additionally, for Smith &
Nephew, these factors include: economic and financial conditions in
the markets we serve, especially those affecting health care
providers, payers and customers; price levels for established and
innovative medical devices; developments in medical technology;
regulatory approvals, reimbursement decisions or other government
actions; product defects or recalls or other problems with quality
management systems or failure to comply with related regulations;
litigation relating to patent or other claims; legal compliance
risks and related investigative, remedial or enforcement actions;
disruption to our supply chain or operations or those of our
suppliers; competition for qualified personnel; strategic actions,
including acquisitions and dispositions, our success in performing
due diligence, valuing and integrating acquired businesses and
disruption that may result from transactions or other changes we
make in our business plans or organisation to adapt to market
developments; and numerous other matters that affect us or our
markets, including those of a political, economic, business,
competitive or reputational nature. Please refer to the
documents that Smith & Nephew has filed with the U.S.
Securities and Exchange Commission (the "SEC") under the U.S.
Securities Exchange Act of 1934, as amended, including Smith &
Nephew's most recent annual report on Form 20-F, for a discussion
of certain of these factors. Any forward-looking statement is based
on information available to Smith & Nephew as of the date of
the statement. All written or oral forward-looking statements
attributable to Smith & Nephew are qualified by this caution.
Smith & Nephew does not undertake any obligation to update or
revise any forward-looking statement to reflect any change in
circumstances or in Smith & Nephew's expectations.
Trademark of Smith & Nephew. Certain marks registered US
Patent and Trademark Office.
Additional Information about the Proposed Transaction and Where
to Find It
The tender offer described in this press release has not yet
commenced. This press release is provided for informational
purposes only and does not constitute an offer to purchase or the
solicitation of an offer to sell any securities. At the time the
tender offer is commenced, Smith & Nephew, Smith & Nephew
Consolidated, Inc. and a wholly owned subsidiary of Smith &
Nephew intend to file with the SEC a Tender Offer Statement on
Schedule TO containing an offer to purchase, a form of letter of
transmittal and other documents relating to the tender offer, and
Osiris intends to file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the tender offer. Smith
& Nephew and Osiris intend to mail these documents to the
Osiris stockholders. Investors and stockholders should read those
filings carefully when they become available as they will contain
important information about the tender offer. Those documents may
be obtained without charge at the SEC's website at www.sec.gov or
by contacting the information agent for the tender offer. INVESTORS
AND SECURITY HOLDERS ARE ADVISED TO READ THESE DOCUMENTS WHEN THEY
BECOME AVAILABLE, INCLUDING THE SOLICITATION/RECOMMENDATION
STATEMENT OF OSIRIS AND ANY AMENDMENTS THERETO, AS WELL AS ANY
OTHER DOCUMENTS RELATING TO THE PROPOSED TRANSACTION THAT ARE FILED
WITH THE SEC, CAREFULLY AND IN THEIR ENTIRETY PRIOR TO MAKING ANY
DECISIONS WITH RESPECT TO WHETHER TO TENDER THEIR SHARES PURSUANT
TO THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT
INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE PROPOSED
TRANSACTION
.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACQGGUMCWUPBGPP
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