A Medical Device Daily

Orthopedics powerhouse Stryker (Kalamazoo, Michigan) has acquired eTrauma.com (Deerfield Beach, Florida), a privately held developer of software for picture archiving and communications systems (PACS) with a specific focus on orthopedics imaging.

The $50 million cash deal is seen as expanding Stryker's portfolio of orthopedic technologies.

eTrauma.com, which had 2004 sales of about $18 million, will be operated as a wholly owned subsidiary in combination with Stryker Endoscopy's imaging business. Its proprietary PACS image management and viewing software, OfficePACS, has functionality directed toward the workflow of orthopedic practices. The 50-employee company had annual sales of $18 million in 2004.

eTrauma.com has designed technology that enables medical information contained in charts and X-rays to be sent electronically, via the Internet, eliminating the need for film and paper documentation.

“Digital imaging and electronic medical records are two of the most exciting, rapidly growing markets today, and eTrauma.com is solidly the U.S. leader in orthopedic PACS due to its singular focus on this specialty,“ William Enquist, president of Stryker Endoscopy, said in a company statement. He said the acquisition would allow Stryker to leverage its “extensive relationships“ with orthopedic surgeons and “the digital integration of our endoscopic and image-guided surgery technologies.“

Enquist added: “We believe this combination offers significant improvement in the capture and transfer of orthopedic patient imaging information.“

eTrauma.com will continue to operate out of its Deer-field Beach offices and will retain its work force, company president and CEO John Hodgeman said. He will serve as general manager of the Stryker Imaging business.

Hodgeman said the deal leaves his firm “poised to take even greater advantage of this fast-growing market. The integration of images, documents and communications software provides clinics with powerful tools to improve patient flow, safety and outcomes. We have the right products and being a part of Stryker provides us with the critical mass to build on orthopedic synergies.“

He told the Kalamazoo Gazette that eTrauma.com holds a 36% share of the orthopedic imaging market.

Stryker, a leading seller of orthopedic implants, formed its imaging business less than two years ago with about 10 employees, Patrick Anderson, vice president of strategy and communication, told the newspaper. Noting that Stryker was developing a product similar to that of eTrauma.com, he added: “ We were out there. We realized that the leader in the market was a very good company. We saw the potential in combining our resources with theirs and really leveraging what we both have.“

Nexa Orthopedics (New York), a Healthpoint Capital portfolio company, reported the acquisition of Futura Biomedical (Vista, California), a manufacturer of forefoot arthroplasty products and a developer of implants for the correction of flexible flatfoot deformities.

“We see the extremity sector of the orthopedic surgery market as an exciting investment opportunity,“ said John Foster, Healthpoint Capital chairman and CEO. “Futura provides Nexa with the most experienced management team in the extremity sector with a track record working with thought-leading surgeons in the extremities subspecialties to drive the development of novel surgical products.“

Paul Nichols, president and CEO of Nexa Orthopedics, said, “Futura's high-growth product lines, excellent network of independent sales agents and distributors and operating platform give Nexa a strong foundation on which to build. With the support of Healthpoint, [we are] positioned to emerge as a technology leader in extremities orthopedics.“

Nexa was founded last year by Healthpoint Capital to create a leading company in extremities surgery through a program of business investments, technology in-licensing and internal development.

Nichols has 15 years of experience in extremities orthopedics as both an executive and entrepreneur, including founding Avanta Orthopaedics.

Also in the orthopedics sector, Zimmer Holdings (Warsaw, Indiana) said it has entered into a letter of intent for a comprehensive agreement with Massachusetts General Hospital (MGH; Boston) and the Cambridge Polymer Group (CPG; Cambridge, Massachusetts) to license technology to develop and commercialize advanced orthopedic polyethylene and hydrogel materials, and to collaborate on research aimed at identifying promising future materials technologies.

“As a result of this long-term agreement, Zimmer will extend and enhance its position as the No. 1 provider of advanced polyethylene materials in the orthopedic industry,“ said Ray Elliott, Zimmer chairman, president and CEO. “We have positioned ourselves to provide the next generation of products that will eventually succeed our current premium brands — Longevity, Prolong and Durasul highly crosslinked polyethylenes. In MGH and CPG, we believe we have the best possible partners with which to pursue the promising and emerging area of utilizing hydrogels in orthopedic applications.“

The agreement will provide Zimmer exclusive, worldwide rights for the CIMA (Cold Irradiated, Mechanically Annealed) highly crosslinked polyethylene technology, as well as for hydrogels for certain orthopedic applications.

The agreement also will provide co-exclusive licenses for technologies involving vitamin E-treated highly crosslinked polyethylene.

Zimmer said that CIMA particularly may offer the potential to retain the proven wear resistance of its existing highly crosslinked polyethylenes while enhancing the mechanical properties of components manufactured using the materials so they can be used in more high-demand applications.

The three parties also agreed to pursue research funded by Zimmer into future technologies, with Zimmer receiving the rights to commercialize funded innovations that may result from such research.

In other dealmaking news:

• NIH Research (Coral Springs, Florida), which characterizes itself as the nation's leading provider of market research, lead generation, lead qualification and lead-tracking services for the healthcare information technology (IT) market, reported completing its acquisition of CDS Systems, a technology services firm.

The company said the transaction was finalized during last week's Healthcare Information and Management Systems Society annual conference in Dallas.

NIH Research said the acquisition enhances its current offerings to include technology consulting, implementation, procurement and support services. It said these newly available services are offered under the name NIH Technologies.

The company said the addition of NIH Technologies to its product portfolio serves to further its goal of being a total sales solution for the healthcare IT industry.

Bruce Roberson, CEO and co-founder of NIH Research, said, “By offering bundled outsourced services such as opportunity databases, lead generation, market research, customer satisfaction, win-loss and other data-gathering services in combination with technology solutions such as sales tracking systems, as well as other sales support technologies, our clients can focus on what they do best — selling.“

David Levy, founder of CDS Systems, will oversee the operations of NIH Technologies as executive vice president of NIH Research.

• Raymedica (Minneapolis), a manufacturer of non-fusion spinal implants for the treatment of back pain, said that Medtronic (also Minneapolis) would return the European and Indian distribution rights of the PDN—SOLO Prosthetic Disc Nucleus to Raymedica. It said a new distribution network would be established during 2Q05 to market the device.

“We are grateful for Medtronic's efforts in distributing the PDN during this evaluation stage,“ said John Viscogliosi, chairman and CEO of Raymedica. “This change in distribution management will allow Raymedica to take a stronger, more active and direct role in the distribution of its technology and products and in the education and training of surgeons who will implant the PDN device.“

He said the transition also would allow the company to have greater control over the collection of clinical data on European patients and to generate “significantly greater“ retrospective and prospective data.

The PDN device is comprised of a hydrogel material contained within a woven polyethelene jacket. It is designed to replace the form and function of an otherwise failed spinal disc nucleus. To treat low-back pain, a PDN device is implanted in the center of the spinal disc. The device is designed to further support the annulus tissue and vertebrae bones of a patient's spine while allowing for more flexibility and movement than spinal fusion, the current established surgical treatment, in which adjacent vertebrae of the spine are fused together.

The PDN-SOLO device is commercially available in Europe and other international markets, but is not yet approved for distribution in the U.S. Raymedica is pursuing marketing approval from the FDA.