Medical technology provider Stryker has purchased Israel-based shoulder implant developer OrthoSpace for up to $220m, enabling pharmaceutical firm Johnson & Johnson and medical equipment manufacturer Smith & Nephew to exit.
The all-cash deal will involve an upfront payment of $110m from Stryker, followed by future milestone payments that could potentially reach $110m.
OrthoSpace has created a biodegradable balloon implant called InSpace that helps reduce shoulder pain and improve the range of motion in the joint for patients with rotator cuff injuries.
The product is designed to helps patients avoid surgery and fits between the scapula and acromion bones in the shoulder to reduce friction. It has been approved in the European Union and is currently undergoing clinical studies in the US.
Andy Pierce, president of Stryker’s medical surgery unit, said: “The acquisition of OrthoSpace is highly complementary to our existing portfolio and aligns with Stryker’s focus on investing in sports medicine.
“We are excited about the momentum OrthoSpace has in key global markets and the additional surgical option this technology provides our customers to address a complex pathology.”
OrthoSpace secured $7m in a 2016 round featuring Johnson & Johnson Innovation – JJDC, the corporate venturing arm of Johnson & Johnson, as well as Smith & Nephew, private equity firm HealthpointCapital and health-focused venture capital fund Triventures.
HealthpointCapital had previously led an $8m funding round for the company the year before, investing alongside Smith & Nephew and Triventures.