HOUSTON, TX--(Marketwire -05/07/12)- Essex Woodlands (www.ewhv.com), a global healthcare growth equity and venture capital firm, announced today the launch of Bioventus LLC, a strategic partnership with Smith & Nephew, the largest UK-based medical device company.
Headquartered in Durham, N.C., Bioventus is Smith & Nephew's former Biologics Division/Clinical Therapies business that generates about 250 million dollars in revenue annually on a worldwide basis. The product line includes the EXOGEN® Ultrasound Bone Healing System, and hyaluronic acid joint fluid therapy products, SUPARTZ® and DUROLANE®, which treat the symptoms of osteoarthritis. These innovative products provide clinical benefits to patients and cost savings to payers by delaying or eliminating the need for knee surgery In the case of bone stimulation, expensive follow-on procedures for bone fractures which do not heal are avoided. Bioventus' products will be marketed in the U.S. (in the case of EXOGEN and SUPARTZ products) by a 250+ person sales force and, for the time being through a distribution agreement with Smith & Nephew in most markets outside the United States for a period of time until those markets can be transferred to Bioventus.
"For years, patients and healthcare providers have relied on our innovative products and our customer-facing professionals who work directly with them to assist in providing quality care," said Mark Augusti, CEO of Bioventus, who previously was the President of Smith & Nephew's Biologics Division. "As an independent company with the support and backing of the Essex Woodlands led investor syndicate and Smith & Nephew, we will be able to focus attention and resources to more quickly deliver new clinically proven and cost effective solutions to market."
"We are very excited about the formation of Bioventus and our strategic partnership with Smith & Nephew," commented Marty Sutter, Founding Partner and Managing Director of Essex Woodlands and Bioventus Board member. "Bioventus epitomizes our growth equity strategy of using the cash flow from well-established businesses to fund innovation that can be nurtured and incubated in a highly-focused private company."
"Many medical device spinouts that have sufficient size and are profitable have been extremely successful," said Guido Neels, Managing Director of Essex Woodlands and Bioventus Board member. "Bioventus has a large global footprint and the resources to fund research or acquire regenerative technology assets that will improve patient outcomes."
Essex Woodlands and its equity partners Pantheon Ventures, Spindletop Healthcare Capital, Alta Capital Partners, Ampersand Capital Partners, and White Pine Medical, are investing $118M to acquire 51% of Bioventus.
Partner Scott Barry, who led this transaction for Essex Woodlands, observed, "Bioventus is a very unique and exciting partnership between a healthcare focused investor group, Essex Woodlands, and a strategic partner, Smith & Nephew, which created a highly innovative structure to build a leading orthopedic biologics company."
Smith & Nephew, which also provided debt financing for the deal in the form of a $160 million 5-year note assumed by Bioventus, will retain a 49% equity stake in Bioventus.
"With superb products, a proven team, world class investors and a strong strategic partner, Bioventus is well positioned to continue to grow its core products, and expand internationally while funding pioneering research," remarked White Pine Medical's CEO Dan Lemaitre, who will serve as Chairman of the Bioventus Board of Directors.
Reed Smith LLP acted as legal counsel to Essex Woodlands for this transaction.
About Essex Woodlands
With over $2.5 billion under management, Essex Woodlands is one of the largest and oldest growth equity and venture capital firms pursuing investments in pharmaceuticals, biotechnology, medical devices, health care services, and health information technology. Since its founding in 1985, Essex Woodlands has maintained its singular commitment to the healthcare industry and has been involved in the founding, investing, and/or management of over 120 healthcare companies ranging across all sectors, stages and geography. The team is comprised of 25 senior investment professionals with offices in Palo Alto, Houston, New York and London. For more information please see www.ewhv.com.
About Smith & Nephew
Smith & Nephew is a global medical technology business dedicated to helping improve people's lives. With leadership positions in Orthopaedic Reconstruction, Advanced Wound Management, Sports Medicine and Trauma, Smith & Nephew has almost 11,000 employees and a presence in more than 90 countries. Annual sales in 2011 were nearly $4.3 billion. Smith & Nephew is a member of the FTSE100 (SN.L - News) (SNN - News).
Bioventus is a global leader of active orthopaedic healing, providing clinically proven and cost-effective therapies and diagnostics that help patients regain active lifestyles. The company's innovative products include the market-leading bone stimulation device and osteoarthritis joint fluid therapies. Bioventus' adherence to high quality standards, its commitment to evidence-based medicine and its strong ethical behavior make it a trusted partner for physicians worldwide.
EXOGEN is a registered trademark of Bioventus LLC
DUROLANE is a registered trademark of Q-Med AB.
SUPARTZ is a registered trademark of Seikagaku Corporation.