Bacterin International Holdings, Inc. is combining its orthobiologics business with X-spine Systems, Inc.’s hardware products to form Xtant Medical Holdings, Inc.
Bacterin and X-spine Combine Into Xtant Medical
2 min read Premium comments
Secondary
In a July 27, 2015 SEC filing, Bacterin said it intended to purchase the outstanding share of privately owned X-spine in exchange for approximately 4.24 million shares of Bacterin common stock and around $60 million in cash. In addition, $13 million will be paid to X-spine’s lender in full satisfaction of X-spine’s revolving credit facility, which will be terminated at the closing.
Dan Goldberger, Bacterin’s CEO, said the transaction reinforces the company’s strategic initiatives to expand product offerings and expand distribution capabilities. “With the addition of X-spine, we will have a stronger financial profile with over $80 million of revenue and positive EBITDA.” According to the companies, hardware will comprise 55% of total revenue with the remaining 45% coming from biologics sales.
Additionally, the new company will have over 300 field sales representatives and over 50 national accounts and regional health system contracts served by 240 employees.
X-spine’s spinal implants and instrumentation, with an emphasis on less-invasive treatments for the degenerative spine, are “highly complementary” to Bacterin’s orthobiologics portfolio, stated the SEC filing. “The great majority of spinal procedures using X-spine’s product portfolio could use an orthobiologic that Bacterin currently offers.”
Xtant Medical Products
The following products will comprise the Xtant Medical portfolio:
Biologics
- OsteoSponge (biologic scaffolds made from demineralized bone that is malleable and flexible, which enables more efficient and precise handling)
- OsteoSelect (DBM putty)
- 3Demin (cortical fibers, boats and strips)
- Sports Med (used for ACL repair)
Hardware
- Axle (minimally invasive systems)
- IRIX-C (standalone zero profile cervical & lumbar integrated fusion system)
- Calix (interbody PEEK Optima systems)
- Xpress (minimally invasive pedicle screw system)
- Silex (sacroilliac joint fusion system)
Transaction Details
The transaction will be funded by an amended and restated $42 million senior secured debt facility with OrbiMed and $65 million of convertible senior notes. OrbiMed has also entered into a definitive agreement to purchase $53 million of convertible senior notes.
David Kirschman, M.D., president and CEO of X-spine since its founding in 2003, will join the management team and serve as executive vice president and chief scientific officer of Xtant Medical. He will also be president of X-spine Systems, the hardware subsidiary. Dr. Kirschman will also be appointed to the Xtant Medical Board of Directors. X-spine, like Bacterin, will become a wholly owned subsidiary of the new company.
Bacterin was founded in 1998 by Guy Cook as a sole proprietorship as a spinout of the Center for Biofilm Engineering at Montana State University (CBE). Goldberg replaced Cook in August 2013.
React:
Discussion
This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
Join the conversation
Orthopedic professionals are discussing this. Sign in and upgrade to read every comment and add your voice.