Avanos Medical has signed a definitive agreement to acquire medical device firm OrthogenRx in a deal valued at about $160m.
OrthogenRx is focused on developing and commercialising therapies to treat knee pain that is caused by osteoarthritis (OA).
Its current product portfolio includes two commercial hyaluronic acid (HA) therapy products, namely GenVisc 850 and TriVisc.
Under the terms of the deal, Avanos Medical will pay $130m in cash at closing and an additional $30m payment will be made based on the achievement of growth milestones related to the GenVisc 850 and TriVisc products.
The company stated that the products are indicated to treat OA knee pain in individuals who have not responded to conservative, non-pharmacologic treatment and simple analgesics.
Both products have obtained US Food and Drug Administration (FDA) approval and are said to complement Avanos Medical’s COOLIEF cooled radiofrequency (RF) treatment portfolio for knee OA.
Avanos CEO Joe Woody said: “The acquisition of OrthogenRx enhances our chronic pain portfolio by providing continuum of care treatment options for patients living with knee OA.
“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.”
The transaction, which is subject to customary closing conditions including approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, is anticipated to be concluded in the first quarter of next year.
The new business is expected to contribute nearly $65m in revenue next year, the company said.
For the deal, Canaccord Genuity is acting as financial advisor and Blank Rome is serving as legal counsel to OrthogenRx. Alston & Bird is acting as legal counsel to Avanos.
In February last year, Avanos Medical secured FDA approval to commercialise its 80W COOLIEF RF system for neurological lesion procedures.