DURHAM – Bioventus Inc. has exercised its call option and has acquired CartiHeal Ltd. in a deal worth up to $450 million.
According to a statement, Bioventus (Nasdaq: BVS) acquired the company for $315 million with an additional $135 million that is contingent on hitting benchmarks tied to trailing twelve month sales.
The company, which already owned a stake in CartiHeal, will fund the acquisition costs with additional debt.
Last week, CartiHeal Ltd. received premarket approval for the Agili-C™ implant by the U.S. Food and Drug Administration (FDA). Bioventus exercised its call option as a result, according to the company’s statement.
The Agili-C™ implant received breakthrough device designation by the FDA in 2020. The technology is believed to be a cost-effective solution for cartilage regeneration. Bioventus made a $50 million escrow payment in August 2021 following a follow-on investment of $15 million that granted the company the option to buy CartiHeal Ltd.
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What comes next
According to the company, the deal could close during the second quarter of 2022. Bioventus noted that there could be a limited market release of CartiHeal’s product during the third quarter of the year.
“CartiHeal represents an important breakthrough for the treatment of osteoarthritis, and we are excited to bring this complementary product into our growing portfolio of medical devices,” said Ken Reali, CEO of Bioventus in the statement.
Reali estimated that the acquisition could result in a $1.3 billion market opportunity for the company. “We look forward to leveraging our strong existing commercial infrastructure to begin commercializing CartiHeal in the coming months,” added Reali.
The transaction is expected to close during the second quarter subject to certain customary closing conditions, and Bioventus plans a limited market release (LMR) of CartiHeal in the U.S. during the third quarter of 2022.
Bioventus completed its acquisition of Misonix, Inc. in the fourth quarter of 2021. That deal was reportedly a cash and stock transaction worth some $518 million, that had also been announced earlier in the year.
