Smith & Nephew to acquire Osiris Therapeutics for $660M

Posted on March 12, 2019


Smith & Nephew ($SNN) announces that it has agreed to acquire Osiris Therapeutics, Inc. ($OSIR), a fast growing company delivering regenerative medicine products, including skin, bone graft and articular cartilage substitutes, for $19.00 per share in cash, representing a total equity value of approximately $660 million.

Namal Nawana, Chief Executive Officer, Smith & Nephew, 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.”

Osiris delivered revenue of $102 million for the nine-months ended 30 September 2018, an 18.7% increase over the comparable period in 2017. Revenue was $36.5 million for the three-month period ended 30 September 2018, a 22.4% increase year on year. Osiris is expected to publish its Fourth Quarter and Full Year 2018 results on 15 March 2019.

Osiris’ principal products, Grafix and Stravix, accounted for more than 70% of revenue in the first nine months of 2018, and drove the majority of growth. We expect 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 $900 million per annum and growing at 7% annually.

Skin substitute Grafix is a cryopreserved placental membrane intended for application directly to acute and chronic wounds, including wounds with exposed bone and tendon. Grafix is supported by robust evidence including two randomised controlled trials, six non-randomised trials and more than 20 peer-reviewed publications in the last 5 years. In October 2018, Osiris launched Grafix PL PRIME, a lyopreserved product that can be stored at room temperature, improving usability for healthcare professionals.

Stravix is a cryopreserved placental tissue used as a surgical cover or wrap to support soft tissue repair in a wide range of surgical procedures.

Simon Fraser, President, Advanced Wound Management at Smith & Nephew, 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.”

Osiris also offers BIO4 bone matrix for bone repair and Cartiform, an allograft for articular cartilage repair, products currently exclusively distributed by third parties.

Peter Friedli, Chairman and co-founder of Osiris, 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.”

Osiris’ 360 employees are expected to join Smith & Nephew on completion.