BONEZONE

DEC 2016

Published by ORTHOWORLD Inc., BONEZONE delivers strategic sourcing & product commercialization solutions to orthopaedic device company decision makers and their partners.

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81 BONEZONE • December 2016 Blue Belt marked SNN's entry into the robotics world, start- ing with the partial knee segment. SNN seeks to expand its NAVIO indications to include total hip, sports medicine and total, bi-cruciate and revision knees, too; the total knee appli- cation gained FDA 510(k) clearance in 2Q16 and the first total knee procedure occurred in 3Q16. SNN is vocal about the differences between NAVIO vs. Mako, citing advantages such as portability, price, a smaller footprint, ideal for ambulatory settings, etc. BST-CarGel is now part of the company's broad Arthro- scopy/Soft Tissue Repair portfolio (you'll remember its acquisition of ArthroCare in 2014); the product is cleared for use in microfracture and bone marrow stimulation in the treatment of focal cartilage tears in geographies like Australia, Canada and most of the EU. Medtronic is the last of the Top 5, with its acquisition of Responsive Orthopedics, a start-up focused on sales of low- cost hip and knee replacements. A primary knee has launched in the U.S., with a primary hip to follow in 1H18. Why hips and knees for Medtronic in the U.S.? The acquisition supports MDT's Orthopedic Solutions ini- tiative, which seeks to reduce system costs for hospital cus- tomers across an entire episode of care while maintaining or improving outcomes. (No word on whether other orthopae- dic product types will be added to the mix.) It's a step toward MDT's tactic to use episode of care bundles to enter new markets and share direct accountability for patient outcomes. It wasn't just the Top 5 companies in the mix, of course. Corin acquired Wright Medical's hip and knee assets: the entire legacy Tornier large joints business. Considering that Wright has sought to be a purely extremities company for quite a while, and that those large joints are primarily sold ex- U.S.—Corin is headquartered in the U.K.—this makes sense. (Corin has a longstanding and deep focus on large joints, and purchased its own positioning technology to support hip pro- cedures in 2014.) Majority shares of Lima Corporate were acquired by EQT, a private equity firm, with Hansjorg Wyss as co-investor. (The latter was the majority shareholder of Synthes, now part of DePuy.) This is interesting because of the level of muscle now at Lima's disposal as it seeks to further establish its proprie- tary Trabecular Titanium technology in revision hips, boost its position in the knee market and further its growth in extremi- ties joint recon and trauma, including shoulder and elbow. Lima's new Advisory Board consists of Doug Kohrs, former CEO and president of Tornier, with more than 25 years of experience in the orthopaedic industry, as well as Eric Lohrer as a representative of Mr. Wyss. In its 1Q16 call, Globus Medical leadership had noted a 1.5% market share ownership ex-U.S. and reiterated its desire to exit 2016 with ex-U.S. sales at double-digit growth vs. 2015. In 3Q16, it acquired Alphatec Spine's international business. This served to approximately double GMED's international revenue and secure immediate access to Brazil and Japan. (Per their 2Q16 call, more than half of what GMED expects to "do with the Alphatec acquisition is in Japan.") Further, per the 2Q call, GMED's ex-U.S. market share is now ~3%; there is plenty of room to grow. JRI Orthopaedics acquired Sheffield Medical Products, designer of the AEON cemented total hip, for which JRI had served as exclusive distributor and partial manufacturer. JRI will now offer the system under the brand name Avanteon. Having taken the system through 700 implantations (mostly local to Sheffield in the U.K.), Sheffield's directors felt that JRI would be better positioned to continue AEON's development and regulatory paths to new geographies. NuVasive activity means that it's no longer truly pure-play spinal. The acquisition of Ellipse Technologies diversified its revenue mix with the PRECICE limb-lengthening system, which may lead to partnerships in the treatment of trauma and knee osteoarthritis. M&A activity is expected to remain heightened in 2017, especially if the larger players follow through with the strat- egy that bigger and diversified is better. Julie Vetalice is ORTHOWORLD's Editorial Assistant. She can be reached at julie@orthoworld.com. BUSINESS CRITICAL Acquisitions by Purchase Price Transaction details were not made public for most of the deals made in 2016. Of the pur- chase prices that were made public, six came in above $100 million. 1. Zimmer Biomet/LDR: $1 billion 2. GE/Arcam: ~$690 million 3. NuVasive/Ellipse: $380 million 4. Smith & Nephew/Blue Belt Technologies: $257 million 5. Zimmer Biomet/Medtech: $132 million 6. LISI Medical/Alcoa Remmele: $102 million

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