Bioventus Buys Allograft Product Line from Advanced Biologics

Durham. N.C.-based Bioventus, a developer of orthobiologic solutions, has acquired the OsteoAMP product line, intellectual property and commercial business from Advanced Biologics LLC. OsteoAMP is a tissue-based bone biologic product that is used by spine surgeons to promote natural bone growth and healing.

Terms of the deal were not disclosed.

OsteoAMP is a bone allograft made using a proprietary process designed to retain the bone’s natural growth factor complement. OsteoAMP comes in four formats and, according to a release from Bioventus, is a cost-effective alternative to recombinant growth factors and allograft-derived stem cells. The four distinctive formats of the product (granules, compressible sponges, putty, and structural grafts) are designed to allow surgeons to tailor delivery of the technology according to their needs in surgery.

Founded in 2009, Ladera Ranch, Calif.-based Advanced Biologics is a privately held company focused on developing innovative and clinically relevant biologic solutions across a wide degree of medical specialties. Bioventus is a 2012 spinoff from Smith & Nephew plc, which still owns 49 percent of the company. The remainder is held by private-equity group Essex Woodlands.

“Surgical orthobiologics is a priority for Bioventus and this acquisition puts the company in position to engage with customers in this market and grow the segment,” said Anthony P. Bihl III, CEO of Bioventus. “We are very pleased to be in business with the talented team at Advanced Biologics. The well developed and successful clinical data set distinguishes OsteoAMP from competitive technologies. In addition, this agreement also includes R&D (research and development) and product supply which could lead to future innovations in this space.”

“The exciting part about developing OsteoAMP with my colleagues was seeing our collective vision of changing the bone grafting landscape with OsteoAMP become a reality,” said Amit Govil, president, Advanced Biologics. “As OsteoAMP has proven itself through multiple published clinical data sets we wanted to seek a buyer with a shared culture and vision to service this market and broaden the use of this suite of products.”

Bioventus will distribute OsteoAMP through the current network of distributors.

To accelerate the growth of the OsteoAMP product line Bioventus is creating a new business group and has appointed Henry Tung, M.D., as vice president and general manager of Surgical Orthobiologics for the company. Tung previously served as vice president and managing director of the international headquarters of Bioventus. Prior to that he led strategic planning and business development for the biologics division of Smith & Nephew.

The acquisition of OsteoAMP, together with the 2013 agreement with Pfizer to develop the next-generation bone morphogenetic protein (BMP), are the foundation for this new business.

ODT recently caught up with Dr. Tung (pictured left) to discuss this latest acquisition for Bioventus and the company’s plans going forward for the new business group.

ODT: What made OsteoAMP a good fit for Bioventus?
Tung: Surgical orthobiologics is a priority for Bioventus and this acquisition puts the company in position to engage with customers in a market we currently do not reach. The largest orthobiologic market segment consists of bone graft substitutes sold through a surgical channel for spine fusion. The OsteoAMP product from Advanced Biologics has the most developed and successful data set of the non-rhBMP2 products. We believe this product and its differentiation in the category will give customers a clear reason to engage with Bioventus.

ODT: Has Bioventus worked with Advanced Biologics before? How was the deal structured?
Tung: Bioventus has been monitoring Advanced Biologics as part of our strategy to actively target business development opportunities in the surgical orthobiologic space. We cannot get into specifics on financial terms, but Bioventus has acquired the OsteoAMP product line, intellectual property and commercial business from Advanced Biologics and this agreement with Advanced Biologics also includes R&D and product supply for the next four years, which could lead to future innovations in this space.

ODT: Please discuss the new business unit’s plans going forward. What are your immediate priorities? Do you expect future portfolio growth to come more from acquisition or through internal R&D?
Tung: Now that we have closed the sale, each party is operationalizing respective teams for the coming integration tasks to transfer the OsteoAMP product line, intellectual property and commercial business to Bioventus over the next 90 days. While this agreement includes R&D that could lead to future innovations, we will also continue our overall growth via strategic acquisitions in surgical orthobiologics.

ODT: What do you see as the biggest opportunity for the new business unit?
Tung: The largest market segment of orthobiologics is the spine surgical space. This acquisition gives Bioventus an offering in the surgical market and is the initial step in our strategic plan to grow the business in surgical orthobiologics. In addition, Bioventus brings a business strategy, investment capital, people and infrastructure that support more rapid growth for customers of this product in the space.

ODT: Where are the challenges for your business sector?
Tung: The challenges for the sector are the same pressures faced by all medical technology manufactures, providing quality products with clinical data to demonstrate cost-effectiveness. That is what makes OsteoAMP such a good match for Bioventus. We saw that OsteoAMP has the clinical data to demonstrate very competitive value for bone fusion, which is a challenging problem for surgeons in this space.