Industry News

Fort Wayne Metals offers new PTFE coatings and expands its wire product line.

Michael Barbella

NuVasive Inc. is expanding its offering of bone graft products to surgeons. The San Diego, Calif.-based spinal device manufacturer has entered into an agreement with Progentix Orthobiology BV, a Netherlands-based developer of orthobiologics.

NuVasive will invest $15 million in cash up front and be obligated to purchase Progentix for $45 million if certain preset development milestones are met. The initial payment will consist of a $10 million equity purchase from Progentix shareholders and a $5 million loan used to fund ongoing clinical and regulatory efforts, company officials said.
In addition, NuVasive obtained exclusive worldwide distribution rights as well as an exclusive option to purchase all of Progentix under certain circumstances.

Progentix is developing a synthetic bone substitute designed to accelerate healing. NuVasive executives said sales of the bone substitute could reach $10 million next year and climb to $30 million over the next several years. And, the expanded product platform—comprised of calcium phosphate synthetic bone substitutes—could potentially generate more than $100 million in annual revenue for NuVasive, company officials predicted.

NuVasive Chairman and CEO Alex Lukianov said the agreement will enable the company to fill a “large product gap in the orthobiologics market,” which is estimated to be worth about $1 billion. “The Progentix material, along with Osteocel Plus, will allow NuVasive to offer its surgeon customers both synthetic and human-derived products that fill an important market need…and build on our FormaGraft Collagen Bone Graft Matrix product line,” he explained.

The deal marks NuVasive’s third foray into the biologics arena. Last May, the company acquired Osiris Therapeutics’ stem cell bone graft business for $35 million. In a news release announcing the merger, Luk-ianov said the deal would enable his company to participate in the U.S. biologics market and would provide a “powerful platform for future biologic product development.”

In January 2007, NuVasive invested $2 million in Maxigen Biotech, a Taiwanese manufacturer of bone grafting products.

Fort Wayne Metals Adds to its Wire Product Line

Fort Wayne Metals Research Products Corp. has expanded its wire product line, offering customers three additional types of wire and advanced coatings.

The polytetrafluoroethylene (PTFE) synthetic flouropolymer coatings can be used in a wide range of medical applications to incease lubricity and chemical resistance, according to a news release from the company.

The proprietary spool-to-spool process provides smooth, uniform coatings with a lower coefficient of friction than spray coating techniques. The Fort Wayne, Ind.-based firm offers a coating called LubriSkin for coiling wire applications and mandels, and DuraSkin for coating SLT wire, a straight linear one-to-one torque wire used for PTCA guidewires and stylets.

“Through advanced coating processes, Fort Wayne Metals is able to provide coated wire that resists the cracking and flaking associated with conventional spray coating,” said Bob Myers, executive vice president of Fort Wayne Metals. “With excellent control over the coating thickness, we are able to guarantee tight tolerances.”

Besides the new wire PTFE coatings, Fort Wayne Metals has added three types of wire to its product line: tungsten, gold plated tungsten and gold plated molybdenum.

With the highest melting point of all metals, tungsten maintains it strength at high temperatures and is a good conductor of heat and electricity. It also has a high absorption capacity for radioactive radiation and X-rays, according to the company. Gold plated tungsten wire can be used in applications that require soldering, protection from corrosion, or a reduction in the secondary emission of electrons.

Molybdenum wire has a high melting point, is strong in high temperatures and high thermal conductivity. It also possesses low thermal expansion and low heat capacity. Gold plating protects the wire from corrosion and enables it to be soldered to other metals.

“With the addition of tungsten and molybdenum, Fort Wayne Metals continues to demonstrate a commitment to providing the medical manufacturing industry with the widest range of materials for product development,” Myers said.

Orthofix to Shareholders: Oppose Ramius Proposal

Orthofix International N.V. is urging its shareholders to vote against a proposal by Ramius LLC to sell Blackstone Medical, a subsidiary that makes spinal implants and other instruments.

Ramius, a global investment management firm based in New York, N.Y., owns a 5 percent stake in Orthofix but wants to control four of the 10 seats on the orthopedic equipment manufacturer’s board of directors. Orthofix shareholders had not yet voted on the proposal by Ramius as of press time.
In a letter to its shareholders, the Orthofix board called Ramius an “opportunistic, activist hedge fund that has engaged in numerous proxy contests over the past several years.” Board members claim Ramius appears to be unable to manage its own affairs, citing published reports that said the company was forced to close four of its funds in the last year.

“Since beginning the proxy contest, Ramius has demonstrated that…they have no plan,” the letter to shareholders stated. “At first, they wanted to remove the company’s CEO from the board, now they don’t. Their original score strategy was to sell our Blackstone Medical subsidiary at any price, now they say they have ‘no present plans to pursue [any] specific strategies.’ ”

In addition, board members claim the Ramius proposal would disrupt the progress managers at Orthofix and Blackstone are making in executing the company’s strategic plan, which include the accelerated launch of an adult stem cell-based allograft and the limited market release of two new products, the Firebird pedicle screw system and the Pillar SA interbody device.

Industry analysts agreed that selling Blackstone Medical would jeopardize the company’s long-term growth efforts. The letter cited comments from two analysts on the Ramius proposal.

“Orthofix is in a position where it must execute its current strategy through 2009 to achieve its guidance,” a Feb. 18 comment from Vancover, British Columbia-based Canaccord Adams read. “We believe any attempt to divest the Blackstone business in a fire sale would disrupt Orthofix’s current strategies and limit the company’s near-term and long-term potential.”

Susquehanna International Group reached a similar conclusion. “The Ramius proposal would “likely result in an immediate increase in shareholder value, but this may not necessarily be the best long-term strategic move for the company,” a Feb. 24 statement from the Bala Cynwyd, Pa. -based firm said. “We believe management is taking appropriate steps to successfully turn around its spine business.” Board members also claimed in the letter that Ramius has refused their attempts to avoid a “costly and disruptive proxy contest.”

“Particularly, in these challenging economic times, the board and management team of Orthofix are focused on maximizing value for all of the company’s shareholders, rather than focusing solely on the interests of any single group. We urge you to support your board,” the letter concluded.

The board already has the support of at least one member, Robert Gaines-Cooper, a group chairman at Venner Capital SA. In a Feb. 18 letter to Jeffrey Smith, a partner at Ramius, Gaines-Cooper said Orthofix’s management team is showing progress in executing its long-term strategic growth plan.

“I wholeheartedly supported the Blackstone acquisition at its inception, and I believe the current Board and management team are implementing a wise strategic plan,” Gaines-Cooper said in his letter. “I remain convinced that a spine strategy in which Blackstone plays a central role will be a crucial driver of success for Orthofix. This letter will, therefore, serve as notice that you do not have my support.”

K2M Develops Spine Stabilizing Technique

K2M, a spinal device firm based in Leesburg, Va., has developed a minimally-invasive surgical technique to stabilize the spine.

The Potomac Rod System and the Serengeti Minimally Invasive Retractor System have received CE Mark clearance for international distribution, the company announced.

The Potomac Rod System, which will be distributed outside the United States, uses a one-piece rod design to enhance the stabilization of the spine. The elasticity of the rod helps stabilize the spine and potentially reduce problems associated with traditional fusion materials, according to a news release heralding the new technique. The product’s design also allows it to be implanted using typical surgical techniques or by using the Serengeti retractor system.

K2M introduced its Serengeti system to the market in 2007. The product enables surgeons to insert spinal implants through small incisions, a process designed to provide improved visualization and access for multi-level complex posterior instrumentaion procedures.

“The introduction of the Serengeti and Potomac marks an important milestone in K2M’s mission to provide surgeons with techniques and technologies that will enhance their ability to treat spinal patients,” said Eric Major, K2M president and CEO.

“CE Mark clearance for these next-generation products expands the K2M product offering and fuels our rapid growth into the global markets, helping to position K2M as a leader for developing solutions to help surgeons address the most complex spinal technologies.”

CUREXO Technology Moves its Headquarters

CUREXO Technology Corporation is moving to a new home. The company is moving its headquarters 77 miles from Sacramento, Calif., to Fremont, a city of more than 200,000 people near San Jose.

The 34,000 square-foot building in Fremont is more than three times the size of the firm’s old home in Sacramento. CUREXO’s president said the new building will enable the company to be closer to its vendors and draw from a “pool of highly-accomplished professionals.”

CUREXO manufactures surgical robotic systems for orthopedic surgery.

SIDEBAR:

Smith & Nephew Launches Wound Therapy Product

The name says it all.

The new Renasys Go from Smith & Nephew is specifically designed for people on the go. The negative pressure wound therapy device can be worn around the neck like an MP3 player, enabling patients to treat wounds as they go about their daily routines. The device can be used with the Renasys-F foam and Renasys-G gauze, helping to make the product more cost-effective, said Joe Woody, president of Smith & Nephew’s Advanced Wound Management division.

“Smith & Nephew understands that in the more ambulatory wound care environments, ease of use and cost effectiveness are paramount,” Woody noted. “That’s why we designed the Renasys Go to be easy for the caregiver to use, simple for the patient to manage, and compatible with our Renasys-F foam dressings as well as Renasys-G gauze kits, which can be more cost-effective.”

Besides its small size (the device weighs less than three pounds and fits into a carrying case), the Renasys-Go runs quietly and features digital settings that reduce the chance of operator error, according to a news release from the company.
The product also has multiple alarms and a lock-out feature for safety purposes. Plus, a 20-hour battery life and a charge-up time of less than four hours help extend patients’ mobility.

“Wound care patients deserve discretion and mobility,” said Robin Carlstein, senior vice president of Advanced Wound Care Services at Smith & Nephew. “We designed the Renasys-Go to provide patients with the flexibility to return to their routines without sacrificing the quality of therapy needed to promote wound healing.”