DURHAM – In the latest twist of an acquisition saga dating back some three years Durham-based life science firm Bioventus is to pay millions of dollars to shareholders of a company it announced plans to acquire for $315 million.

Investors in Bioventus (Nasdaq: BVS) eacted positively to the news with shares surging more than 20 percent.

The deal involves CartiHeal in which Bioventus made a $15 million investment in 2020. That agreement eventually led to Bioventus’ announced acquisition plan which has stumbled in large part due to financing concerns.

Bioventus and CartiHeal shareholders have agreed to a period of up to 60 days to find a resolution to financing that has hampered the closing of the acquisition which was announced in 2021.

“In exchange for the release of the Company’s obligations and the 30-day period, the Company agreed to pay the CartiHeal Sellers $10,000,000 in cash as well as $150,000 in a non-refundable expense reimbursement payment. The Company will also have the option to exercise up to two extension periods of 15 days each in exchange for an additional $5,000,000 payment per extension,” Bioventus said.

The entire deal could end up being scrapped.

“Funding options will only be pursued by the Company on an opportunistic basis, on terms that the Company believes would be favorable to its stakeholders. If the Company does not obtain funding sufficient to satisfy the $215 million of Post-Closing Tranche obligations, plus any applicable interest, under the Amended Purchase Agreement by the expiration of the 30-day period, the Company has agreed to transfer ownership of CartiHeal to the CartiHeal Sellers. In addition, during the 30-day period, the CartiHeal shares have been transferred to a trust for the benefit of the CartiHeal Sellers,” Bioventus explained.

CartiHeal received premarket approval from the U.S. Food and Drug Administration (FDA) for a product known as Agili-C, an implant for the treatment of certain knee-based surface lesions, in March of 2022.

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