Smith & Nephew acquires OsteoBiologics for $72.3 million

By E. Janene Geiss

Philadelphia, July 11 - Smith & Nephew's Endoscopy division announced Tuesday its acquisition of privately held OsteoBiologics, Inc., which markets bioabsorbable bone graft substitutes in Europe to repair cartilage defects in the knee and TruFit BGS Plugs in the United States as a bone void filler.

OsteoBiologics products add to Smith & Nephew's existing arthroscopy portfolio and will be sold through Smith & Nephew Endoscopy's global selling force, according to a company news release.

Smith & Nephew said it has agreed to pay a net consideration of $72.3 million in cash for OsteoBiologics, whose 2005 sales were $3.3 million.

The acquisition is expected to reduce earnings by $7 million in the second half of 2006 and be broadly neutral in 2007, officials said.

OsteoBiologics' primary product marketed in Europe, TruFit CB is a one-step arthroscopic procedure for repairing bone and articular cartilage defects.

Cartilage is a protective covering of the articular surfaces of bones that reduces friction and provides flexibility within the joint. Cartilage defects are often a result of traumatic injury or degenerative conditions and are often found in conjunction with meniscal tears or ACL injuries.

There is strong evidence that articular cartilage defects can lead to osteoarthritis.

Currently, less than 20% of cartilage defects in the knee are treated due to the lack of an efficacious and patient-friendly solution, officials said.

OsteoBiologics is a privately held company based in San Antonio.

Smith & Nephew is a London medical technology company.

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