Smith & Nephew to buy US biotech Osiris Therapeutics for $19 a share
By Michele Maatouk
Date: Tuesday 12 Mar 2019
(Sharecast News) - Medical devices maker Smith & Nephew has agreed to buy US biotechnology company Osiris Therapeutics for $19 per share, which is an enterprise value of around $660m.
Osiris - which delivers regenerative medicine products, including skin, bone graft and articular cartilage substitutes - generated revenue of $102m in the nine months to 30 September 2018. Its principal products, Grafix and Stravix, accounted for more than 70% of revenue and drove the majority of growth.
S&N said it expects these two products to continue to deliver strong double-digit growth into the medium term. Grafix and Stravix participate in the US skin substitute market, which is currently worth $900m a year and growing at 7% annually, according to data from SmartTrak Market Research.
The deal, which will be funded from Smith & Nephew's existing cash and debt facilities, is expected to be accretive to the company's adjusted earnings per share from 2020.
S&N's chief executive officer Namal Nawana 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."
The president of the company's advanced wound management division, Simon Fraser, said: "Grafix offers a compelling new option for managing hard to heal wounds and Stravix expands our tissue repair portfolio. We will drive synergies across products from common call points and increased access to our wider customer base."
The transaction is expected to close in the second quarter of the year, subject to customary closing conditions, including relevant antitrust clearances.
At 1315 GMT, the shares were up 0.7% at 1,472p.
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