Smith & Nephew acquires 'game changing' shoulder surgery technology

Smith & Nephew has agreed to snap up a US developer of a "game changing" surgical technology that helps speed the healing process in rotator cuff shoulder injuries.

The FTSE 100 medical technology group will pay up to $210m for to acquire Rotation Medical Inc, comprising an initial $125m in cash and up to $85m over the next five years based on financial performance.

The deal, which is being funded by existing cash and debt and is expected to close before the end of the year, is forecast to have a neutral effect on earnings in the coming calendar year and then a positive effect in 2019.

S&N chief executive Olivier Bohuon said the addition was part of the company's plan to invest in disruptive technologies to boost growth, with Rotation Medical's technology serving unmet clinical needs and a complementary fit in the group's sports medicine portfolio.

Using a bioinductive implant that helps tendons heal by inducing growth of new tendon-like tissue, the Rotation Medical Rotator Cuff System system balances biomechanics and biology to enhance the body’s natural healing response, has been found to stop tendons from tearing further and reduce the incidence of re-tears.

The system, which has regulatory clearance for sale in the US and is preparing to apply for approval in the EU, includes a set of disposable instruments that enable arthroscopic procedures to be reproduced.

In clinical studies the implant has demonstrated the ability to improve tendon healing, resulting in thicker tendons and replacement of tissue defects, as well as improving clinical scores and with a 93% of patients expressing their satisfaction post treatment.

"This is the most innovative product that I have seen in sports surgery in recent years," said Jeffrey Abrams, MD, Princeton Orthopedic Associates and Sports Medicine.

"There have been many improvements in surgical repair, but despite these, in many situations, the quality of the attached tendon is less than optimal. A biological approach to treating rotator cuff disease remains a major priority for surgeons.

"The Rotation Medical bioinductive implant is a game changer in that it improves tendon quality and thickness. My patient outcomes are impressive. This is an exciting technology that has the potential to change the way we treat rotator cuff tears and reverse the natural progression of the disease."

Research last year counted around 650,000 rotator cuff procedures in the in the US, with annual growth of 5-6%.