Medtronic to Acquire Titan Spine

The largest supplier of spinal implants, instruments, robotic assist devices, imaging systems and related biologics, Medtronic plc, has announced its intention to acquire Titan Spine, Inc. a private spine technology company that specializes in titanium spine interbody implants and surface technologies. The transaction was approved unanimously by members of both companies’ boards of directors.

The price paid for Titan was not disclosed.

Medtronic’s Spine Portfolio

Medtronic’s spine business is currently part of Medtronic’s Restorative Therapies Group, along with Brain Therapies, Pain Therapies, and Specialty Therapies.

Jacob Paul, senior vice president and president of the Spine Division of Medtronic Restorative Therapies Group said, “We’ve built the broadest spine portfolio—implants, instruments, enabling technologies, and biologics- in order to provide complete procedural solutions for surgeons’ biggest challenges.” Medtronic’s robust spinal and orthopedic product portfolio includes:

• Balloon Kyphoplasty
• Bone Grafting
• Drug Infusion Systems for Chronic Pain
• Drug Infusion Systems for Severe Spasticity
• Electrosurgical Products
• High-Speed Surgical Drills & Tools
• Nucleus Removal Tools
• Posterior Occipitocervical Upper-Thoracic Reconstructive Systems
• Radiofrequency Ablation System for Bone Tumors
• Spinal Cord Neurostimulation Systems
• SpineLine Reimbursement
• Sports Surgery
• Surgical Imaging Systems
• Surgical Navigation Systems
• Tumor Management
• Vertebroplasty

This year, Medtronic ranked number one in the Forbes healthcare category and number 150 on the Forbes Global 2000 list. The 2019 Forbes Global 2000 list analyzed financial results for the 12-month period ending on April 18, 2019. During that time period, Medtronic recorded $30.1 billion in sales, $4.9 billion in profit, and $113 billion in market value. Debbie Wang, a senior equity analyst at Morningstar, Inc., told Forbes, “Medtronic’s broad portfolio offers the benefit of having waxing product cycles offset other waning product cycles.”

Titan Spine Technologies

Mequon, Wisconsin and Laichingen, Germany-based Titan Spine is a privately held surface technology company that specializes in the development and marketing of spinal interbody fusion devices. Titan markets its line of interbody devices with proprietary textured surface in Europe, Australia, and the United States.

Interbody implants are spacers that are surgically placed in between vertebrae to allow for the bone fusion process while simultaneously relieving nerve pressure and holding the vertebrae in place during healing.

From 2008 to 2018, Titan Spine grew at a rate of more than 40% per year. During this time period, more than 70,000 of Titan’s devices were implanted and it received more than 50 patents. Titan’s revenue had grown to $63 million as of 2018.

Titan Spine’s technology portfolio includes its nanoLOCK^® implants, the only FDA-cleared spinal nanotechnology. These surface-enhanced titanium implants are designed to have nanoscopic features similar to natural bone, to promote increased healing after spinal surgical procedures requiring fusion.

Titan Spine’s next generation interbody devices feature:

• Large windows and internal volumes that provide for significant bone graft packing, desired bone graft loading, clear CT and MRI visualization, and the potential for multi-directional bone growth.
• Endplate sparing design (no ridges or teeth) that does not damage the vertebral endplate. This yields increased resistance to subsidence.
• Large footprints that allow the implants to reside on the apophyseal ring, which further resists subsidence.
• Radiopaque nature of titanium that assists in placing the device in the desired location.
• Large variety of sizes to accommodate various patient anatomies.

Titan Spine’s nanotextured interbody devices have been found to be conducive to bone growth. In 2014, Titan Spine’s nanoLOCK technology received the Whitecloud Award for best basic science from the Scoliosis Research Society. This technology and its promotion of osteogenic and angiogenic growth factors during bone fusion has been found to be evidenced based in a variety of medical journal studies, including those published by:

• The Spine Journal
• Acta Biomateriala
• Spine
• International Journal of Spine Surgery
• The American Journal of Orthopedics
• Frontiers of Bioengineering and Biotechnology
• Journal of Biomedical Materila Research

Company Executives Excited About Acquisition

With its acquisition, Medtronic will acquire Titan Spine’s extensive portfolio of surface-enhanced titanium interbody fusion devices. These spinal technology products will round out Medtronic’s already large portfolio of medical devices.

Sharrolyn Transfeldt Josse, vice president and general manager of Core Spine for Medtronic said, “We’re excited about bringing the Titan Spine team—and their full line of titanium, surface-enhanced interbody fusion devices—into our Medtronic family. Titan Spine shares Medtronic’s commitment of putting patients first and to championing technology that adds value and advances patient outcomes.”

Transfeldt Josse continued, “Spine surgeons are showing a strong interest in surface-enhanced titanium implants for spinal fusion procedures. While Medtronic has a limited titanium interbody device offering, acquiring Titan Spine’s innovative and comprehensive portfolio will enable us to better meet the needs of our customers and patients.”

Dr. Peter F. Ullrich, Jr. Titan’s CEO and President, told OTW, “At first, Titan Spine sought to shift the paradigm that an interbody device was just a spacer to one that could be an active participant in the fusion process. Next, we did extensive research using various subtractive manufacturing techniques to create a surface that mimics what osteoclasts create for stem cells during natural bone production. By combining with Medtronic, we have exponentially increased the number of patients that will benefit from our nanoLOCK^® surface technology. Spinal fusion patients are the beneficiaries of this transaction.”

Dr. Paul Slosar, Titan Spine’s chief medical officer, told OTW, “The acquisition of Titan by Medtronic is a great fit for both companies. Titan Spine has been the market leader in driving the science of surface technology to the forefront of spine. This paradigm shift in the interbody fusion market is now gaining strength and Medtronic is the company best capable of taking this to the next level. They created the bench-mark product (InFuse) which drove the explosion in the spinal biologics market. That experience and expertise will allow Medtronic to again lead the interbody fusion market focused on implants with active surface technology, which is the nanoLOCK surface technology acquired from Titan.”

Financial Details of Acquisition

The transaction is projected to close during Medtronic’s first fiscal quarter, which ends on July 26, 2019. The transaction remains subject to the satisfaction of customary closing conditions including the receipt of regulatory clearances. The terms of the deal were not disclosed. This acquisition is not expected to affect Medtronic’s fiscal adjusted earnings per share for 2020.

The companies have not released any details about what changes will or will not be made related to employees and locations at the time of Medtronic’s acquisition.

Transfeldt-Josse said, “We’re excited to welcome Titan Spine team members into Medtronic after close. At that point leadership from both organizations will work together to ensure Titan Spine’s nanoLOCK surface technology creates a greater impact on the spine market, particularly for the improvement of patient outcomes. As time goes on and after close, further details will be made available.”