Smith & Nephew snaps up cartilage regeneration tech firm CartiHeal

(Sharecast News) - Medical tech giant Smith & Nephew has announced it is spending up to $330m to buy CartiHeal, which specialises in novel cartilage regeneration technology for sports medicine knee repair.

The UK-listed firm said it will pay an initial cash consideration of $180m upon closing, with a further $150m based on the financial performance of the business.

CartiHeal, which started in 2009 as a university spin-out, is the developer of Agili-C - an off-the-shelf one-step treatment for osteochondral (bone and cartilage) lesions which is used to treat people with mild to moderate osteoarthritis, and the 700,000 people needing cartilage repair annually in the US.

"The acquisition of this disruptive technology supports our strategy to invest behind our successful Sports Medicine business", said Smith & Nephew's chief executive Deepak Nath.

"Agili-C's superior clinical performance makes it highly complementary to our existing knee repair portfolio and with our proven commercial expertise in high-growth biologics, we are confident that we will drive further success with this compelling treatment option."

Smith & Nephew said the purchase, which should close in the first quarter of 2024, will be financed by existing cash and debt facilities and is expected to be breakeven to trading profit by 2027.