UPDATE: June 27, 2019: Medtronic announced Thursday it closed its buyout of Titan Spine for an undisclosed amount. The company expects the action to be immaterial to fiscal 2020 adjusted earnings per share.
Dive Brief:
- Medtronic said late Thursday it will buy Titan Spine, a privately held developer of titanium interbody implants. The devices are spacers inserted between vertebrae during spinal fusion surgery to reduce pressure on nerves and hold vertebrae in place, Medtronic said in a press release.
- The acquisition came the same day competitor Boston Scientific announced its own addition to its spine device portfolio, a $465 million purchase of a technology targeting pain in patients with moderate degenerative lumbar spinal stenosis.
- Financial terms of the deal will not be disclosed, Medtronic said. The company expects the deal to close during its first fiscal quarter, which ends July 26.
Dive Insight:
Whereas Boston Scientific's acquisition of Vertiflex's decompression system is designed to help it target patients with moderate back pain, Titan Spine's products are aimed at patients in need of a more invasive spinal fusion solution.
Spinal fusion is a surgery recommended for certain patients with spine deformities, spinal weakness or instability, or herniated disks, intended to permanently connect multiple spinal vertebrae in hopes of decreasing motion between them. The procedure involves implantation of bone, bone-like material, or metal plates, screws and rods to hold vertebrate together and help them heal into a single unit, as described by the Mayo Clinic.
In the case of Titan Spine, those titanium implants feature proprietary "surface technology" meant to more closely resemble bone surface. The company says the unique surface aids in the bone fusion process.
The Mequon, Wisconsin-based company's first 510(k) came in 2008, and the manufacturer has gained a host of additional clearances since then. CMS created a code for a nanotextured surface on an interbody fusion device in 2016, according to Titan Spine.
Medtronic said it will gain Titan Spine's complete portfolio of interbody fusion devices through the acquisition and expects the transaction to be immaterial to its 2020 adjusted EPS.
Spine unit revenues accounted for $655 million of the $2.026 billion Medtronic's Restorative Therapies Group brought in last quarter. While revenues in the spine unit, the largest RTG division, were flat for the third straight quarter, CEO Omar Ishrak said on the February earnings call he predicted spine implant sales would grow in the coming quarters. Brain therapies led the group's growth.
The company will report earnings for its fiscal year 2019 fourth quarter May 23.
