Stryker Sells Bone Growth Franchise to Olympus
Stryker Corp. has inked a deal to sell its bone growth product franchise—the OP-1 product line—to the Olympus Corporation for $60 million. The productline was manufactured by Stryker’s Hopkinton, Mass.-based subsidiary Stryker Biotech LLC.
The deal also includes the divestiture of the Kalamazoo, Mich.-based orthopedic giant’s manufacturing plant in Lebanon, N.H. The transaction has been cleared by the boards of both companies. No timeline, however, was offered for a deal closure date.
The OP-1 product line includes OP-1 Implant and OP-1 Putty for use in orthopedic bone applications such as lumbar spine fusion and the treatment of long bone fractures. The active ingredient in these products is the OP-1 bone growth factor that induces the formation of new bone when implanted.
OP-1 products currently are approved in the United States by the U.S. Food and Drug Administration (FDA) under a Humanitarian Device Exemption (HDE), having provided treatment to roughly 40,000 patients globally. The HDE allows a medical device to be marketed whose effectiveness has not been fully proven and is intended to benefit patients with rare disease or condition that afflict fewer than 4,000 U.S. patients annually.
In August, the company settled a lawsuit filed against its biotech division by the Massachusetts attorney general accusing it of illegally promoting the combination of a pair of its OP-1 products not approved by the FDA. Stryker paid $1.35 million for the settlement.
With the sale of OP-1, Stryker officials said they plan to redirect a part of the related R&D spending to other internal projects, which they believe have the potential to deliver better returns.
Stryker expects to incur a one-time non-cash charge of roughly $75 million to $80 million in fourth-quarter 2010 from the divestiture, which is expected to dilute its earnings per share for the quarter by about 19 cents to 20 cents.