Not so fast… Bioventus backs out of CartiHeal acquisition for $450M (4.5 X sales)

My opinion is that Bioventus decision is a “canary in the coal mine” for the med device market in 2022.

I believe that this is the start of de-leveraging that many orthopedic device companies will go through. Debt is more expensive. The IPO market is closing up. Up rounds are getting rarer. Multiples are going down, etc.

I will write more about the new financial environment here.

Bioventus Cancels Proposed $415 Million Offering of Senior Notes; Reaffirms Full-Year 2022 Financial Guidance

———original acquisition press release April 2022———

Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, today announced that it has exercised its call option to acquire CartiHeal Ltd., excluding the ownership interest already owned by Bioventus, for approximately $315 million, with an additional approximately $135 million payable contingent upon the achievement of $100 million in trailing twelve month sales. Bioventus plans to finance the acquisition with additional debt. The Company’s decision to exercise this option follows the U.S. Food and Drug Administration’s (FDA) March 29, 2022, premarket approval (PMA) of CartiHeal’s Agili-C implant.

Agili-C was granted Breakthrough Device Designation by the FDA in 2020 and is indicated for the treatment of International Cartilage Repair Society (ICRS) grade III or above knee–joint surface lesions, with a total treatable area of 1-7 cm2 for patients without severe osteoarthritis (Kellgren-Lawrence grade 0-3). The Agili-C implant is expected to be a cost-effective solution for cartilage regeneration and bone remodeling designed to delay total knee replacement in patients with joint surface lesions of the knee.

“CartiHeal represents an important breakthrough for the treatment of osteoarthritis, and we are excited to bring this complementary product into our growing portfolio of medical devices. CartiHeal addresses an unmet need in joint preservation and cartilage regeneration for approximately 675,000 U.S. patients annually, representing an estimated $1.3 billion market opportunity for Bioventus. The CartiHeal team has done a tremendous job developing the implant, as evidenced by strong clinical data demonstrating clinical superiority over microfracture or debridement,” said Ken Reali, CEO of Bioventus. “We look forward to leveraging our strong existing commercial infrastructure to begin commercializing CartiHeal in the coming months.”

The transaction is expected to close during the second quarter subject to certain customary closing conditions, and Bioventus plans a limited market release (LMR) of CartiHeal in the U.S. during the third quarter of 2022.

About Bioventus
Bioventus delivers clinically proven, cost-effective products that help people heal quickly and safely. Its mission is to make a difference by helping patients resume and enjoy active lives. The Innovations for Active Healing from Bioventus include offerings for pain treatment, restorative therapies and surgical solutions. Built on a commitment to high quality standards, evidence-based medicine and strong ethical behavior, Bioventus is a trusted partner for physicians worldwide. For more information, visit, and follow the Company on LinkedIn and Twitter. Bioventus and the Bioventus logo are registered trademarks of Bioventus LLC. Agili-C is a trademark of CartiHeal.