Bioness Inc. has been acquired by a new parent that wants to use the company to pursue its strategy of helping patients in rehab.Bioness in Valencia was acquired in a deal with Bioventus Inc. in North Carolina for $45 million.
Ken Reali, chief executive of Bioventus, described the company as an advanced rehabilitation medical products manufacturer. About 80 percent of orthopedic medical offices, where Bioventus sells its products, are affiliated with or located adjacent to a rehab facility.
“So, for us that was a very good match,” Reali said.
Bioventus has no plans to move the company out of the Santa Clarita Valley and the leadership component at Bioness is being determined, Reali said.
“Between the Bioventus and the Bioness teams, we are working through that right now,” he added.
Bioventus was created in 2012 as a spinoff of Smith & Nephew plc, the large United Kingdom-based medical device company, and Essex Woodlands, a health care venture capital firm in Houston. It provides orthopedic treatments to patients with osteoarthritis, bone fractures and bone grafts. The company went public in February and trades on the Nasdaq.
Bioness was founded in 2004 by Al Mann, the late medical devices entrepreneur, to bring products to market to provide functional and therapeutic benefits for patients affected by central nervous system disorders.
Mann and Bioness have a tremendous legacy, Reali said, adding, “We are very proud to continue that legacy with the Bioness products.” Bioventus announced in late April, about a month after the acquisition was made, that it had shipped the first commercial uses of BITS (Bioness Integrated Therapy System) Balance to 14 rehab facilities across the U.S. The system combines visual, cognitive, motor and balance training in one session.‘Durable competitive advantage’Kyle Rose, an analyst with Canaccord Genuity, initiated coverage of Bioventus in early March. In a research note from that month, he said the company was well-positioned at the center of several key themes across medtech, including demographic shifts, an elevated focus on regenerative and preventative medicine, and the shift of procedures to lower acuity settings. He noted that more than 81 percent of U.S. revenues came from office or clinic settings.
“We view this as a unique and durable competitive advantage for (Bioventus), given it has a robust commercial team, reimbursement infrastructure and customer support resources to leverage for future growth opportunities and tuck-in M&A,” Rose wrote in the note.
The acquisition was attractive to Bioventus for the Bioness product line, which currently includes six medical devices which are distributed and sold in more than 40 countries.Among the products that Bioventus can capitalize on is the StimRouter PNS System, a peripheral nerve stimulation therapy for patients suffering from pain after surgery on an extremity. It has been implanted in more than 3,000 patients since 2017 and is sold in more than 10 countries, including the U.S.“A lot of the customers that we work with today are knee surgeons, sports medicine surgeons, and foot and ankle surgeons and they have a great need for post-surgical pain relief,” Reali said. “Particularly now with the opioid crisis, surgeons are looking for ways to relieve pain without having to use or prescribe opioids. This provides a great avenue, and it is the same customer that we call on today with our products.”Pandemic M&AReali became chief executive of Bioventus last April, just after the start of the pandemic.
Late last summer, the company rolled out a more aggressive strategy when it came to M&A and began to look at mergers and acquisitions differently than the company had in the past, Reali said.
At the same time, the company was looking to go public, which it did in February.
“That was also designed to increase the opportunities that we could do from an M&A perspective to build the business,” Reali added.
The timing of the Bioness acquisition was predicated on several factors, he continued, but it wasn’t a situation where Bioventus had been waiting in the wings for a long time until the company was ready to sell.“With Bioness, we started digging into the company last fall and doing due diligence and then closed on the deal at the end of the first quarter of this year,” Reali said.
Bioness Bought by Rehabilitation Device Maker
