Kalamazoo, Michigan-based medical device giant Stryker has continued its M&A spree with the purchase of OrthoSpace, in an effort to round out its sports medicine portfolio.
The acquisition price for the Israeli company was $110 million in upfront cash payments with the potential for an additional $110 million upon meeting certain commercial milestones.
The announcement about the OrthoSpace acquisition comes only a few weeks after Stryker said it would purchase Menlo Park, California-based Arrinex.
OrthoSpace’s main product is InSpace, which is essentially an implantable, biodegradable balloon system that can be used as an alternative to rotator cuff surgery. The device helps to reduce pain in the area and improve the shoulder’s range of motion.
“With 20,000 treated patients world-wide, InSpace addresses severe rotator cuff tears for patients who have few other options,” OrthoSpace CEO Itay Barnea said in a statement. “We are so pleased to be joining Stryker as we start this next phase of our growth in bringing InSpace to patients in need in additional countries, and I am thankful for the contributions of the OrthoSpace team and shareholders in getting us to this point.”
InSpace is CE Mark approved and is currently undergoing clinical studies in the U.S.
Since its founding in 2009, OrthoSpace has received more than $18 million in funding from investors including Johnson & Johnson, Smith & Nephew and HealthpointCapital, a private equity firm specializing in the musculoskeletal space. OrthoSpace will be added to Stryker under its MedSurg business segment.
“The acquisition of OrthoSpace is highly complementary to our existing portfolio and aligns with Stryker’s focus on investing in sports medicine,” MedSurg Group President Andy Pierce said in a statement.
“We are excited about the momentum OrthoSpace has in key global markets and the additional surgical option this technology provides our customers to address a complex pathology.”
Last year was a particularly acquisitive period for Stryker which bought up five companies for more than $2.5 billion in total: Entellus, SafeAir, K2M, Invuity and HyperBranch Medical Technology.
The largest of those deals was the $1.4 billion purchase of Leesburg, Virgina-based K2M.
In response to an analyst question on an earnings call about the company’s M&A plans in 2019, Stryker CEO Kevin Lobo said the company will continue on its current path.
“It is our number one source and planned use of cash. That’s not changing. In six years, I would expect us to continue to be acquisitive,” Lobo said on the call.
Photo: designer491, Getty Images
