Bioventus has exercised its call option to acquire Israeli devicemaker CartiHeal for up to $450 million following the FDA's premarket approval of the Agili-C implant on March 29.
The orthobiologics company is splashing $315 million on CartiHeal — excluding the ownership interest Bioventus already has in the company — with another $135 million payable upon the achievement of $100 million in trailing 12-month sales, according to an April 4 news release.
Bioventus said it plans to fund the acquisition with additional debt.
Agili-C, which received breakthrough device designation by the FDA in 2020, is "expected to be a cost-effective solution for cartilage regeneration and bone remodeling designed to delay total knee replacement in patients with joint surface lesions of the knee," according to CartiHeal.
CartiHeal's product portfolio addresses an unmet need in joint preservation and cartilage regeneration for about 675,000 U.S. patients a year, which represents an estimated $1.3 billion market opportunity, Bioventus CEO Ken Reali said.
"The CartiHeal team has done a tremendous job developing the implant, as evidenced by strong clinical data demonstrating clinical superiority over microfracture or debridement," Mr. Reali said. "We look forward to leveraging our strong existing commercial infrastructure to begin commercializing CartiHeal in the coming months."
The deal is expected to close in the second quarter, with a limited market release of CartiHeal planned in the U.S. during the third quarter.
The acquisition comes six months after Bioventus acquired spine device company Misonix for $518 million in cash and stock.