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4 Spine Acquisitions from 1Q21

Spine continues to be an active space for mergers and acquisitions, accounting for four of the six announced orthopedic OEM agreements that we tracked in the first quarter of 2021.

Three of the acquisitions – NuVasive’s purchase of Simplify Medical, Implanet’s merger with Orthopaedic & Spine Development (OSD) and Neo Medical’s purchase with TriOs Medical – allow the buying company to expand their implant portfolios. SeaSpine’s acquisition of 7D Surgical moves the company into the enabling technology space.

We provide a brief snapshot of each acquisition.

        Simplify Medical Disc
        Simplify Cervical Disc

NuVasive Purchases Simplify Medical

NuVasive acquired Simplify Medical and its Simplify® Cervical Artificial Disc for $150 million in cash, along with future milestones related to regulatory approval and sales. 

Simplify Disc is designed for MRI compatibility, physiologic motion and anatomical height-matching. The disc was granted premarket approval from FDA for 1-level cervical indications in late 2020. A premarket approval submission for a 2-level Investigational Device Exemption was later completed.

“The acquisition of Simplify Medical advances our previously communicated long-term growth strategy by both expanding, and further distinguishing, our portfolio with industry-leading innovation,” said NuVasive CEO Chris Barry. “Combining the Simplify Disc with NuVasive’s C360 portfolio will enable us to provide surgeons with world-class cervical technology, regardless of their preferred procedural approach.”

SeaSpine Acquires 7D Surgical

SeaSpine agreed to acquire all issued and outstanding shares of 7D Surgical. The transaction, valued at $110 million, is expected to close in 2Q21.

The companies partnered in a strategic alliance in February 2020 to distribute 7D Surgical’s navigation system founded upon its machine-vision, image-guided platform. The system reduces radiation by eliminating intra-operative CT and fluoroscopy, with the patient registration process taking 30 seconds compared to 30 minutes with traditional systems.

According to analysts, 7D Surgical had 54 systems placed and contractual sales of over $19 million as of March.

        OSD SAXXO Spinal Fixation
             
OSD SAXXO
Spinal Fixation
  

Implanet Acquires Stake in OSD

Implanet plans to acquire a majority stake in Orthopaedic & Spine Development, developer and manufacturer of implants for spine surgery. OSD’s lineup includes a range of cages, plates and fixation systems for lumbar and cervical applications.

“This merger with OSD will strengthen our spinal implant range, notably for the adult market, while positioning Implanet as an integrated supplier capable of competing with the market’s largest players,” said Ludovic Lastennet, CEO of Implanet. “The merger will enable us to rapidly achieve a critical mass in terms of revenue. Reaching this critical mass will ensure that, in the coming years, we will be able to meet regulatory, clinical and economic demands in a fast-growing market.”

Mr. Lastennet said that the company had become a pivotal player in pediatric spinal deformity through its JAZZ technology. Still, the company’s portfolio range limited its ability to grow at a similar pace in the degenerative adult segment.

Neo Medical Purchases TriOs Medical

Neo Medical acquired Germany-based TriOs Medical. Neo will leverage years of collaboration with TriOs as the company’s exclusive commercialization partner in the region to strengthen its position in the thoracolumbar fixation market.

Neo launched its first product in Germany in 2017. Since then, the company’s products have been used in over 10,000 surgeries, with over 90% of cases performed by recurrent users.

“With a 45% growth in 2020, Neo Medical remains on its rapid development trajectory despite the current health and economic context,” said Vincent Lefauconnier, Neo Medical CEO. “This year will continue to see the company accelerating in our two strategic markets, Germany and the U.S., starting with the milestones announced today, while growing rapidly in the other European regions where we currently operate.”

Spine has been the most active orthopedic market for M&A in recent years, partly because there are hundreds of players in the space. We expect acquisitions to remain an important strategy as companies seek to bolster their implant and enabling technology portfolios.