A Medical Device Daily
DJO (San Diego), a global provider of products and services that promote musculoskeletal and vascular health, reported the completion of its agreement and plan of merger with ReAble Therapeutics (Austin, Texas).
The deal, valued at about $1.5 billion, initially was reported in mid-July.
Following the closing, ReAble Therapeutics will be renamed DJO Inc. and will relocate its headquarters to Vista, California.
Under the terms of the merger agreement, holders of DJO's common stock will receive $50.25 in cash for each share of DJO common stock held. As a result of the merger, DJO's common stock ceased to trade on the New York Stock Exchange at the close of the market Tuesday.
Financing for the merger was provided by the combination of an equity contribution from Blackstone Capital Partners V, an affiliate of The Blackstone Group, and debt financing arranged by Credit Suisse and Bank of America.
"On behalf of both DJO and ReAble, I am pleased that we have completed this transaction, which establishes our company as one of the largest global providers of solutions for musculoskeletal and vascular health," said Les Cross, CEO of the new DJO Inc. "Both organizations have enjoyed a proud history, with talented employees driving each company to a respected leadership position in their markets. "
He added, "This combination provides us with great opportunities to strengthen our value proposition for our customers in two important ways. First, the crossover of our distribution channels should provide our sales teams with significant cross-selling opportunities in global markets for the two companies' product lines, providing our customers with one-stop access to some of the best brands in the business.
"Second, the merger accelerates the pace of innovation within the new DJO. From the collaboration of our product development teams we can bring unique new products to market that better serve the needs of our customers and their patients."
Marketed under the Aircast, DonJoy and ProCare brands, the company's broad line of more than 750 rehabilitation products, including rigid knee braces, soft goods and cold therapy products, are used in the prevention of injury, in the treatment of chronic conditions and for recovery after surgery or injury.
The company's regeneration products consist of bone growth stimulation devices that are used to treat nonunion fractures and as an adjunct therapy after spinal fusion surgery. Its vascular systems products help prevent deep vein thrombosis and pulmonary embolism that can occur after orthopedic and other surgeries.
ReAble Therapeutics manufactures a comprehensive line of orthopedic devices used by orthopedic surgeons, physicians, therapists, athletic trainers and other healthcare professionals to treat patients with musculoskeletal conditions resulting from degenerative diseases, deformities, traumatic events and sports-related injuries.
Through its Orthopedic Rehabilitation Division, ReAble is a major distributor of electrical stimulation and other orthopedic products used for pain management, orthopedic rehabilitation, physical therapy, fitness and sport performance enhancement. Its Surgical Implant Division offers a suite of reconstructive joint products.
In other dealmaking news, OncoVista (San Antonio), a biopharmaceutical company focused on development of treatments for cancer, reported that it has merged with Aviation Upgrade Technologies (AUT; Monarch Beach, California).
AUT, which ceased all previous business operations on Aug. 16, entered into an agreement and plan of merger on Oct. 26 with OncoVista Acquisition (also San Antonio), a subsidiary of OncoVista.
On Nov. 13, OncoVista Acquisition merged with and into a newly formed, wholly owned subsidiary of AUT, and OncoVista is the surviving company. As a result of the merger, OncoVista became a wholly-owned subsidiary of AUT, and OncoVista's existing business operations became AUT's sole line of business. The reverse merger is being accounted for as a recapitalization.
Alexander Weis, CEO of OncoVista, said, "We are very pleased to have completed this transaction, which makes OncoVista a public company engaged in bringing innovative cancer treatments to patients. We intend to develop treatments that increase patient survival rates and enhance patient quality of life due to their lower toxicity and/or greater efficacy. By commercializing our novel therapeutics, we plan to address a significant share of the market for cancer therapeutics in the US and the rest of the world."
OncoVista has a product pipeline comprised of Phase I and Phase II clinical-stage compounds, pre-clinical drug candidates and leads, and diagnostic kits marketed in Europe for the detection of circulating tumor cells (CTCs) in breast and colon cancer patients. The kits are manufactured by AdnaGen, in which OncoVista holds a 51% stake, and marketed through an agreement with Innogenetics. OncoVista is working with AdnaGen to secure approval to market the kits in the U.S.
OncoVista's lead product candidate is Cordycepin (OVI-123), which is in Phase I/II clinical trials for refractory leukemia patients who express the enzyme terminal deoxynucleotidyl transferase (TdT). The FDA has granted Orphan Drug designation to OncoVista for Cordycepin, giving the Company seven years of market exclusivity once the drug is approved for marketing. It is anticipated that the Company will enroll the first patient on trial in 1Q08.
The company's lead drug candidate from the L-nucleoside conjugate program (OVI-117) is currently in GLP animal drug safety studies. Upon completion of the studies, OncoVista will compile and submit an Investigational New Drug (IND) application to the FDA in order to start Phase I clinical trials in humans.
In addition to conducting clinical trials, OncoVista intends to perform pre-clinical studies to increase its understanding of the mechanism of action of its products in cancer. It also will investigate and develop alternative delivery systems and determine the optimal dosage for different patient groups.
The company said it also will demonstrate proof of concept in animal models of human cancers and develop biomarker panels that will facilitate the development of its therapeutic products.