Wright Medical to snap up BioMimetic in potential $380M deal
Eyeing growth in the regenerative medicine field, Wright Medical Group ($WMGI) is making a calculated gamble on BioMimetic Therapeutics ($BMTI). While BioMimetic awaits a key FDA decision for its lead product, Wright has agreed to acquire the company for $190 million up front and $190 million down the road depending on certain milestones.
BioMimetic has struggled to gain U.S. approval of its recombinant protein product for bone grafts, with the FDA denying the Franklin, TN-based company a green light to sell the therapy in January and requesting more information. BioMimetic has submitted the info, and the agency is weighing a potential approval for foot and ankle fusions, opening the doors to a key market for the protein therapeutic, called Augment Bone Graft.
Wright, based in Arlington, TN, has built in hedges on its offer to BioMimetic, whose investors can only cash in on half of the $380 million deal value if Augment gains the coveted FDA approval and sales goals are met. Wright is paying $1.50 in cash and 0.2482 shares of its common stock for each share of BioMimetic common stock, valuing Biomimetic at $190 million or $6.47 per share based on the Nov. 16 closing price. It's also agreed to issue one contingent value right for each share of BioMimetic, with the total potential payments of $6.50 per CVR.
As Bloomberg reports, Wright's offer is a 56% premium on BioMimetic's closing price of $4.15 per share on Friday. With news of the deal, BioMimetic's share jumped 76% in premarket trading.
If all goes as planned, Wright said, the deal is set to close in the first quarter of 2013.
"We believe this transaction will significantly accelerate the continued transformation of our business as well as our strategy of building a world-class biologics platform and growing our foot and ankle business at well above market growth rates," Wright CEO Robert Palmisano stated.