Smith & Nephew Jumps Into Stem Cells

UK-based global medical technology giant Smith & Nephew plc has announced its agreement to acquire Osiris Therapeutics, Inc., a fast-growing regenerative medicine company.

Smith & Nephew will purchase Osiris for $19.00 per share in cash, representing a total value of approximately $660.5 million. Following the acquisition, Osiris’ 360 employees are expected to join Smith & Nephew. The transaction is expected to close in the second quarter of 2019, subject to the relevant antitrust clearances and the tender of the majority of the outstanding shares of Osiris in favor of the transaction.

The merger agreement provides that, in connection with the termination of the merger agreement under specified circumstances, including termination by Osiris to accept a superior proposal, Osiris will be required to pay to Smith & Nephew a fee equal to $18,682,450.

Osiris is a Columbia, Maryland-based regenerative medicine company that focuses on the development of bioengineered stem cell and tissue-based products. Osiris reported revenues of $102 million for the nine-month period ending September 30, 2018, which was an 18.7% increase over the same period the previous year.

Osiris’ principal products, Grafix^® and Stravix^®, drove the company’s growth over the past year. These two products are part of the U.S. skin substitute market, which is currently worth $900 million annually and growing at a rate of 7% per year.

Namal Nawana, Smith & Nephew chief executive officer said, “Greater presence in the fast-growing regenerative medicine market enhances our portfolio and will help immediately accelerate our wound management business as well as provide longer term innovations in additional channels and indications. We sought out a fast-growing portfolio with strong clinical evidence addressing critical needs in the marketplace.”

Peter Friedli, Osiris chairman and co-founder said, “I am immensely proud of the business we have built from our research into advanced regenerative technologies. Smith & Nephew is the best new owner to take these products forward, widening access to more customers and restoring quality of life for more patients.”

Friedli has entered into a Tender & Support Agreement with Smith & Nephew whereby he committed to tender approximately 30% of the outstanding shares of Osiris in favor of the transaction.