Warsaw, Indiana-based OrthoPediatrics Corp., a company focused solely on pediatric orthopedics, has announced the purchase of Wayland, Iowa-based MD Orthopaedics, Inc., a company that specializes in the treatment of clubfoot.
OrthoPediatrics Corp. Acquires MD Orthopaedics
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The transaction is valued up to $19.6 million. Per the agreement terms, OrthoPediatrics will acquire MD Orthopaedics for $8.2 million in an upfront cash payment, $8.9 million in OrthoPediatric’s stock, and “an additional $2.5 million in restricted stock which vest after three years.”
Needham & Company, LLC analysts, Mike Matson, CFA, David Saxon, CFA, and Joseph Conway sent a note to their clients regarding the acquisition. The analysts stated in part, “We believe the acquisition could help KIDS (OrthoPediatrics) expand into bracing and other forms of non-surgical treatment and management estimates that the deal could expand KIDS’ (OrthoPediatrics) total addressable market by up to $600M [million].”
The analysts may have additional insight into the deal in the coming months. The analysts remarked, “We intend to wait to update our model until KIDS reports its 1Q22 [first quarter 2022] results.”
Established in 2004, MD Orthopaedics is a privately held orthopedic device company. The company’s bracing systems are sold in 90 countries across the globe. It currently has 14 issued patents and 7 additional pending patents.
The acquisition includes MD Orthopaedic’s bracing products and its clubfoot treatment, the Mitchell Ponseti® Ankle-Foot Orthosis (AFO). OrthoPediatrics plans to use MD Orthopaedics as a “specialty bracing platform company within OrthoPediatrics Trauma & Deformity business.”
OrthoPediatrics also plans to further develop the MD Orthopaedics product portfolio. The company plans to “develop several new innovative products that address the large unmet needs for specialty bracing within the pediatric orthopedic market.”
OrthoPediatrics Chief Executive Officer David Bailey commented, “We believe MD Orthopaedics will be a springboard for our expansion into pediatric orthopedic non-surgical treatments for kids and further supports our mission of helping children living with orthopedic conditions.”
Bailey continued, “The addition of non-operative specialty bracing systems advances our growth strategy of providing a broad product portfolio uniquely designed to treat children while surrounding pediatric orthopedic surgeons with the most comprehensive product offering in the market.”
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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.
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