SBi Sells Shoulder Technology to French Firm

Small Bone Innovations Inc. (SBi) certainly is living up to its name.

The company has sold its shoulder-related assets to French orthopedics firm Fx Solutions for an undisclosed amount. SBi executives said the sale would allow the New York, N.Y.-based firm to focus on arthroplasty, trauma reconstruction technology and treatments for small bones and joints. Proceeds from the sale will be used to streamline product management and accelerate product introductions and launches, particularly for its S.T.A.R. total ankle replacement device, according to a news release. SBi also will use proceeds to fund clinical studies of certain “key products.”

Approved last May by the U.S. Food and Drug Administration for ankle joint replacement due to osteoarthritis, post-traumatic arthritis or rheumatoid arthritis, SBi’ S.T.A.R. system is a three-piece mobile bearing uncemented, non-constrained total ankle replacement. Executives claim the design of the S.T.A.R. system is the first of its kind because it relies on movable bearings that glide across the surface of polyethylene. The bearings give the joint some natural movement, a characteristic that is missing in traditional fusion surgeries where the tibia (shinbone) is joined to the talus (the bone that fits into the socket formed by the tibia and fibula, the small bone of the lower leg). Fusing the tibia to the talus strengthens the ankle but severely limits motion.

“This sale enables the company to concentrate exclusively on its small bone and joint product portfolio,” SBi chairman and CEO Anthony Viscogliosi said in a prepared statement. “SBi will focus its efforts on anatomies where we can achieve market leadership and also maximize our ability to address the needs of hospitals, surgeons and patients.”

Fx Solutions, meanwhile, will use SBi’s shoulder technology to build the foundation of its own product line. Jean-Jacques Martin, president of the Viriat, France-based company, said the acquisition will help his firm establish a presence in the shoulder trauma repair sector.

“With the products we are acquiring from SBi as well as those in development, we will be able to advance the standard of care for shoulder fractures and trauma and successfully compete in the marketplace,” Martin said in prepared remarks.

SBi is one of several companies started by investment bank Viscogliosi Brothers LLC as rollups aimed at specific markets. Founded in 2004, SBi focused on acquiring small companies developing technologies for small bones and joints. The company has raised $156 million in a series of funding rounds, according to the release, from backers including Olympus Corp., Khazanah Nasional Berhad (Malaysia’s investment arm), the Malaysian Technology Development Corp., the Family Office of Bahrain, Viscogliosi Brothers LLC, Trevi Health Ventures, NGN Capital, 3i Group and TGap Ventures.

In its latest round of funding, the company managed to raise a total of $15 million of Series F Preferred shares. The Series F funding was led by a fund formed by Viscogliosi Brothers, LLC. Khazanah Nasional Berhad, the investment firm of the Government of Malaysia, NGN Capital and other existing investors.

Anthony G. Viscogliosi, SBi’s Chairman and CEO, said his company would use the proceeds to grow the STAR ankle device product portfolio as well as upper limb arthroplasty and trauma reconstruction product lines.

“We are committed to investing more in STAR’s future to better serve appropriate patients who would benefit from this technology in order to restore the form, function and motion of their ankle,” Viscogliosi said.