NuVasive Buys Spinal Implant Maker Ellipse For $380 Million
By Jof Enriquez,
Follow me on Twitter @jofenriq
NuVasive CEO Says More Acquisitions Are On the Horizon
Orthopedic surgical device company NuVasive has acquired spinal implant maker Ellipse Technologies for $380 million in cash upfront, plus a potential $30 million milestone payment in 2017. The transaction opens up the scoliosis correction market for NuVasive, a major player in surgical spine products that is looking to expand to other niche areas.
Ellipse has developed remote-controlled, adjustable rods for the correction of spinal deformities in children with early-stage scoliosis (MAGnetic External Control, or MAGEC), and intramedullary lengthening of limbs (PRECICE System). The company says its FDA-approved technologies allows doctors to adjust — via a handheld remote controller — implanted magnetic rods, non-invasively in outpatient settings, as patients heal or age. The system offers fewer repeat surgical procedures and better clinical outcomes, the company claims.
“Ellipse’s revolutionary technology, which has been enthusiastically received by surgeons, has the potential to become the standard of care for spine and orthopedic patients. It is in NuVasive’s sweet-spot of game-changing innovation, bolstering our leadership in spine and providing new growth opportunities in the U.S. and around the world,” said Gregory T. Lucier, NuVasive’s chairman and CEO, in a statement.
"This investment expands NuVasive’s footprint into new niche markets with highly differentiated technology that – when coupled with our market-making expertise – will be strategically applied in other spine and orthopedic applications, including degenerative spine disease, trauma and knee osteoarthritis," added Lucier, who was appointed CEO last year.
Ellipse president and CEO Edmund J. Roschak, who will join NuVasive's executive leadership team, added, "Joining forces with NuVasive not only validates the promise of our technology, but provides us with the scale and resources necessary to realize our full potential, to the benefit of our surgeon customers and their patients, faster than we could achieve on our own."
NuVasive pioneered a suite of specialized surgical products used in an alternative approach to spinal surgery, notes Xconomy. Lucier says the acquisition of Ellipse complements NuVasive’s diversifying portfolio of orthopedic products and presents new opportunities for accelerated growth by global expansion.
Ellipse’s products are marketed and sold in the U.S. and 29 other countries, and have been used to treat more than 5,000 patient worldwide. The company reported 2015 revenues of approximately $40 million, and projects 2016 revenues of approximately $60 million, according to the release.
NuVasive expects its purchase of Ellipse to close by the end of February 2016, and to support its target of five-year, double-digit return on invested capital. It is likely to buy more companies, according to The San Diego Union-Tribune. Without delving into specifics, Lucier, whose tenures with other companies were marked with M&A deals, told analysts during a conference call, "You'll see further acquisitions from NuVasive in the coming months."