Avanos Medical, Inc. (NYSE: AVNS) today announced it has entered into a definitive agreement to acquire OrthogenRx, Inc., an emerging leader in viscosupplementation therapies for the treatment of knee osteoarthritis (OA) pain, for a total consideration of $160 million. The purchase price consists of $130 million in cash at closing plus an additional $30 million in contingent cash consideration, payable upon the achievement of growth milestones related to the company’s commercial hyaluronic acid (HA) therapy products, GenVisc 850 and TriVisc.
The treatment of OA knee pain with HA therapy represents a commercial opportunity of $1 billion in the U.S. The addition of GenVisc 850 and TriVisc – both approved by the U.S. Food and Drug Administration and indicated for the treatment of OA knee pain in patients who have failed to respond adequately to conservative, non-pharmacologic therapy and simple analgesics – will complement Avanos’ pain portfolio of COOLIEF* Cooled Radiofrequency treatment for knee OA.
HA injections are a nonsurgical option that clinicians use to treat millions of patients impacted by pain and sustained discomfort due to knee OA. These injections can play a key role in the continuum of care for patients, often providing interim pain relief before transitioning to the next level of treatment options, including COOLIEF*.
“The acquisition of OrthogenRx enhances our chronic pain portfolio by providing continuum of care treatment options for patients living with knee OA,” said Avanos Chief Executive Officer Joe Woody. “This business is a clear strategic fit for Avanos, and one that will further strengthen our relationships with healthcare providers as we seek to become their preferred partner in treating musculoskeletal pain.”
Michael Daley, PhD, and J. David Owens, OrthogenRx, Inc. Co-Presidents and Co-Chief Executive Officers, offered the following comment: “We are extremely proud of our team’s accomplishments, and finding a partner such as Avanos with a similar culture, dedication and focus on patient care is exciting and important for OrthogenRx. This is truly a synergistic integration that creates value for all stakeholders as well as future opportunities for our existing products and pipeline.”
The transaction is expected to close in Q1 2022, subject to customary closing conditions including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Avanos will finance the acquisition through a combination of funds from its existing credit facility and available cash. The company estimates that the new business will contribute approximately $65 million in 2022 revenue and will be immediately accretive to gross and operating margins.
Alston & Bird LLP is serving as legal counsel to Avanos. Canaccord Genuity LLC is serving as financial advisor to OrthogenRx and Blank Rome LLP is serving as its legal counsel.
About Avanos Medical:
Avanos Medical, Inc. (NYSE: AVNS) is a medical technology company focused on delivering clinically superior breakthrough medical device solutions to improve patients’ quality of life. Headquartered in Alpharetta, Georgia, Avanos is committed to addressing some of today’s most important healthcare needs, such as reducing the use of opioids while helping patients move from surgery to recovery. Avanos develops, manufactures and markets its recognized brands in more than 90 countries. For more information, visit www.avanos.com and follow Avanos Medical on Twitter (@AvanosMedical), LinkedIn and Facebook.
About OrthogenRx:
OrthogenRx, Inc. is a medical device company focused on the development and commercialization of treatments for knee pain caused by osteoarthritis (OA). OA is the most common cause of knee pain, causing sufferers significant pain and disability. OrthogenRx aspires to provide every patient with the products they need and assist in getting them back to a life without OA knee pain. Learn more at www.orthogenrx.com, www.genvisc850.com and www.trivisc.com.
