Wright Medical Group, Inc. (NASDAQ: WMGI) and BioMimetic
Therapeutics, Inc. (NASDAQ: BMTI) announced today that they have
entered into a definitive agreement for a business combination of
Wright and BioMimetic, both publicly traded, Tennessee-based
companies. Wright is an orthopedics company with a market-leading
lower extremities franchise. BioMimetic is focused on developing
regenerative medicine products to promote the healing of
musculoskeletal injuries and diseases with a novel protein
therapeutic product, Augment® Bone Graft, under late stage FDA
review as a replacement for autologous bone graft in foot and ankle
fusions. The transaction will combine BioMimetic’s breakthrough
biologics platform and pipeline with Wright’s established sales
force and product portfolio, to further accelerate growth
opportunities in Wright’s Extremities business.
Under the terms of the agreement, the transaction has a total
potential value for BioMimetic shareholders of approximately $380
million, or $12.97 per share, based on Wright’s closing stock price
on Friday, November 16, 2012. Each share of BioMimetic common stock
will be converted into the right to receive an upfront payment of
$1.50 in cash and 0.2482 shares of Wright common stock. The upfront
payment values BioMimetic at approximately $190 million, or $6.47
per share, based on Wright’s closing stock price on November 16,
2012. Each BioMimetic share will also receive one tradable
Contingent Value Right (CVR), which entitles its holder to receive
additional cash payments of up to $6.50 per share, which are
payable upon receipt of FDA approval of Augment® Bone Graft and
upon achieving certain revenue milestones.
Any contingent milestone payments will be paid in cash. The CVR
payments to BioMimetic shareholders are structured as follows:
- $3.50 per share upon FDA approval of
Augment® Bone Graft;
- $1.50 per share upon the achievement of
$40 million in trailing twelve month sales for all products
contributed by BioMimetic;
- $1.50 per share upon the achievement of
$70 million in trailing twelve month sales for all products
contributed by BioMimetic.
The latter two sales milestone payments cannot be made sooner
than 24 and 36 months post-closing of the transaction,
respectively.
The transaction is expected to close in the first quarter of
2013 and is subject to customary closing conditions, including
BioMimetic shareholder approval. The transaction received the
unanimous approval of the board of directors of both Wright and
BioMimetic. In addition, several key shareholders of BioMimetic
have evidenced their support of the transaction by entering into
agreements to vote in favor of the transaction.
Robert Palmisano, President and Chief Executive Officer of
Wright, commented, “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. BioMimetic’s products complement our existing biologics
product portfolio, and, if approved by the FDA as we expect,
Augment® Bone Graft will provide us with a unique solution for the
U.S. hindfoot and ankle fusion market that leverages the
distribution capabilities of Wright’s dedicated foot and ankle
sales organization and our physician training capabilities.”
Dr. Samuel Lynch, President and Chief Executive Officer of
BioMimetic Therapeutics, added, “BioMimetic is delighted to partner
with a company that shares our commitment to building a world-class
biologics platform. We believe that Augment® Bone Graft will become
an important new therapeutics option to improve patient outcomes in
hindfoot and ankle fusion procedures, and that Wright Medical with
its leadership position in the foot and ankle market is the ideal
partner to accelerate the rapid adoption of our products around the
world.”
BioMimetic’s Augment® product line is based on recombinant human
platelet-derived growth factor (rhPDGF-BB), a synthetic copy of one
of the body’s principal healing agents. In May 2011, the FDA’s
Orthopaedic and Rehabilitation Devices Panel of the Medical Devices
Advisory Committee voted favorably on Augment® Bone Graft’s safety,
efficacy and benefit to risk profile for its use as an alternative
to autograft in hindfoot and ankle fusions. In January 2012,
BioMimetic announced receipt of a post-panel non-approvable letter
requesting additional information in a PMA amendment. In June 2012,
BioMimetic submitted a responsive PMA amendment, and the product is
currently pending a final FDA regulatory decision. If approved,
Augment® Bone Graft will be the first clinically proven protein
therapeutic to come to the orthopedics market in a decade, offering
the potential to reinforce surgical bone repair in hindfoot and
ankle fusion procedures effectively, which translates into an
estimated market opportunity believed to be approximately $300
million annually in the U.S. Augment® Bone Graft is currently
available for sale as an alternative to autograft in Canada for
foot and ankle fusion indications and in Australia and New Zealand
for hindfoot and ankle fusion indications.
Although Wright cannot finalize the purchase price allocation
and fair value assessment of the contingent consideration until the
closing, and thus cannot yet assess the exact impact on its future
GAAP earnings, Wright anticipates that the transaction will be
dilutive to adjusted EBITDA until the second full-year post-FDA
approval of Augment® Bone Graft and accretive thereafter. Wright
will provide additional information on the financial impact of this
transaction after the closing.
In connection with this transaction, J.P. Morgan Securities LLC
and Wilson Sonsini Goodrich & Rosati, a Professional
Corporation advised Wright Medical, and Goldman, Sachs & Co.
and Ropes & Gray LLP advised BioMimetic Therapeutics.
Conference Call and Webcast
Wright Medical will host a conference call today, November 19,
2012, beginning at 10:00 a.m. Central Time (11:00 a.m. Eastern
Time) to discuss the BioMimetic transaction, followed by a question
and answer session.
The conference call will be available to interested parties
through a live audio webcast at www.wmt.com, where it will be archived and
accessible for approximately 12 months. The live dial-in number for
the call is 800-591-6930 (U.S.) or 617-614-4908 (International).
The participant passcode is “Wright.”
If you do not have access to the Internet and want to listen to
an audio replay of the conference call, dial 888-286-8010 (U.S.) or
617-801-6888 (International) and enter passcode 47252247. The audio
replay will be available beginning at 12:00 p.m. Central Time on
Monday, November 19, 2012 until Monday, November 27, 2012.
About Wright Medical
Wright Medical Group, Inc. (NASDAQ: WMGI) is a global
orthopaedic medical device company and a leading provider of
surgical solutions for the foot and ankle market. Wright Medical
specializes in the design, manufacture and marketing of devices and
biologic products for extremity, hip and knee repair and
reconstruction. Wright Medical has been in business for more than
60 years and markets its products in over 60 countries worldwide.
For more information about Wright Medical, visit the Wright
Medical’s website at www.wmt.com.
About BioMimetic Therapeutics, Inc.
BioMimetic Therapeutics, Inc. (NASDAQ: BMTI) is a biotechnology
company specializing in the development and commercialization of
clinically proven products to promote the healing of
musculoskeletal injuries and diseases, including therapies for
orthopedics, sports medicine and spine applications. All Augment®
branded products are based upon recombinant human platelet-derived
growth factor (rhPDGF-BB), which is an engineered form of PDGF, one
of the body’s principal agents to stimulate and direct healing and
regeneration. Through the commercialization of this patented
technology, BioMimetic seeks to become the leading company in the
field of regenerative medicine by providing new treatment options
for the repair of bone, cartilage, tendons and ligaments.
BioMimetic has received regulatory approvals to market Augment®
Bone Graft in Canada, Australia and New Zealand for use in hindfoot
and ankle fusion indications. Augment® is pending regulatory
decisions in the U.S. and European Union for similar indications.
BioMimetic also markets a bone graft substitute line of products
for orthopedic indications called Augmatrix™ Biocomposite Bone
Graft. For more information about BioMimetic, visit BioMimetic’s
website at www.biomimetics.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release may contain “forward-looking statements” as
defined under U.S. federal securities laws. These statements
reflect management’s current knowledge, assumptions, beliefs,
estimates, and expectations and express management’s current view
of future performance, results, and trends. Forward looking
statements may be identified by their use of terms such as
anticipate, believe, could, estimate, expect, intend, may, plan,
predict, project, will, and other similar terms. Forward-looking
statements are subject to a number of risks and uncertainties that
could cause actual results to materially differ from those
described in the forward-looking statements. In addition to those
described below, forward looking statements contained in this press
release include, without limitation, statements concerning the
possibility of FDA approval of Augment Bone Graft, statements
regarding market acceptance of, and expected annual market demand
for Augment Bone Graft, statements regarding the expected impact of
the transaction with BioMimetic on Wright’s adjusted EBITDA and
other financial results, and statements about the timing and
expected benefits of the transaction. The reader should not place
undue reliance on forward-looking statements. Such statements are
made as of the date of this press release, and we undertake no
obligation to update such statements after this date. In addition
to those described above, risks and uncertainties that could cause
our actual results to materially differ from those described in
forward-looking statements are discussed in our filings with the
Securities and Exchange Commission (including those described in
Item 1A of our Annual Report on Form 10-K for the year ended
December 31, 2011 and our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2012, in each case under the heading
“Risk Factors” and elsewhere in such filings). By way of example
and without implied limitation, such risks and uncertainties
include: the failure of BioMimetic stockholders to adopt the merger
agreement or the failure of either Wright or BioMimetic to meet any
of the other conditions to the closing of the transaction, the
failure to realize the anticipated benefits from the transaction or
delay in realization thereof, future actions of the United States
Attorney’s office, the FDA, the Department of Health and Human
Services or other U.S. or foreign government authorities that could
delay, limit or suspend our development, manufacturing,
commercialization and sale of products, or result in seizures,
injunctions, monetary sanctions or criminal or civil liabilities;
any actual or alleged breach of the Corporate Integrity Agreement
to which we are subject through September 2015 which could expose
us to significant liability including exclusion from Medicare,
Medicaid and other federal healthcare programs, potential criminal
prosecution, and civil and criminal fines or penalties; adverse
outcomes in existing product liability litigation; new product
liability claims; inadequate insurance coverage; the possibility of
private securities litigation or shareholder derivative suits;
demand for and market acceptance of our new and existing products;
potentially burdensome tax measures; lack of suitable business
development opportunities; product quality or patient safety
issues; challenges to our intellectual property rights; geographic
and product mix impact on our sales; our inability to retain key
sales representatives, independent distributors and other personnel
or to attract new talent; inventory reductions or fluctuations in
buying patterns by wholesalers or distributors; inability to
realize the anticipated benefits of restructuring initiatives;
negative impact of the commercial and credit environment on us, our
customers and our suppliers; and the potentially negative effect of
our ongoing compliance enhancements on our relationships with
customers, and on our ability to deliver timely and effective
medical education, clinical studies, and new products.
ADDITIONAL INFORMATION ABOUT THIS TRANSACTION
This press release may be deemed to be solicitation material
regarding the proposed business combination of Wright and
BioMimetic. In connection with the proposed transaction, Wright
intends to file with the SEC a registration statement on Form S-4,
which will include a proxy statement/prospectus and other relevant
materials in connection with the proposed transaction, and each of
Wright and BioMimetic intend to file with the SEC other documents
regarding the proposed transaction. The proxy statement/prospectus
and this press release are not offers to sell Wright securities and
are not soliciting an offer to buy Wright securities in any state
where the offer and sale is not permitted. The final proxy
statement/prospectus will be mailed to the stockholders of
BioMimetic. INVESTORS AND SECURITY HOLDERS OF BIOMIMETIC ARE URGED
TO READ THE PROXY STATEMENT/PROSPECTUS (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND THE OTHER RELEVANT MATERIAL CAREFULLY IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT WRIGHT AND BIOMIMETIC AND THE PROPOSED
TRANSACTION.
The proxy statement/prospectus and other relevant materials
(when they become available), and any and all documents filed with
the SEC, may be obtained free of charge at the SEC’s web site at
www.sec.gov. In addition, investors and security holders may obtain
free copies of the documents filed with the SEC by Wright by
directing a written request to Wright Medical Group, Inc, 5677
Airline Road, Arlington, TN 38002, Attention: Investor Relations,
and by BioMimetic by directing a written request to BioMimetic
Therapeutics, Inc., 389 Nichol Mill Lane, Franklin, TN 37067,
Attention: Investor Relations.
BioMimetic and its respective executive officers and directors
and other persons, including Wright and its respective executive
officers and directors, may be deemed to be participants in the
solicitation of proxies from its stockholders in connection with
the proposed transaction. Information about the executive officers
and directors of BioMimetic and their ownership of BioMimetic
common stock is set forth in its annual report on Form 10-K for the
year ended December 31, 2011, filed with the SEC on March 13, 2012
and the proxy statement for BioMimetic’s 2012 annual meeting of
stockholders, filed with the SEC on April 27, 2012. Information
about the executive officers and directors of Wright Medical Group
is set forth in its annual report on Form 10-K for the year ended
December 31, 2011, filed with the SEC on February 24, 2012 and the
proxy statement for Wright Medical Group’s 2012 annual meeting of
stockholders, filed with the SEC on March 27, 2012. Certain
directors and executive officers of BioMimetic and other persons
may have direct or indirect interests in the merger due to
securities holdings, pre-existing or future indemnification
arrangements and rights to severance payments if their employment
is terminated prior to or following the transaction. If and to the
extent that any of the BioMimetic participants will receive any
additional benefits in connection with the transaction, the details
of those benefits will be described in the proxy
statement/prospectus relating to the transaction. Investors and
security holders may obtain additional information regarding the
direct and indirect interests of BioMimetic and its executive
officers and directors in the transaction by reading the proxy
statement/prospectus regarding the transaction when it becomes
available.
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