MedTechDive summary
Dive Brief:
- Stryker said Monday it has agreed to buy Artelon for an undisclosed sum to add soft tissue repair technology to its portfolio.
- The deal will give Stryker ownership of soft tissue fixation products for foot and ankle and sports medicine procedures. BTIG analysts said in a research note the takeover could boost growth and serve as a “defensive mechanism against peers who have been growing rapidly in the space.”
- Orthopedic companies including Zimmer Biomet have acquired soft tissue technologies in recent years, but Artelon’s use of synthetic materials sets its products apart from collagen-based rivals.
Dive Insight:
Artelon has developed products to help people recover from injuries such as ankle sprains. Such injuries can resolve over time but some people have pain and instability that lead physicians to recommend surgery. Devices such as Artelon’s Flexband are designed to help restore the strength and elasticity of healing soft tissues.
While some soft tissue products are based on collagen, Artelon’s are made from the synthetic polymers commonly found in other medical devices. Artelon said it developed Flexband to integrate with healing tissue and then dissolve while being replaced with new tissue over a four- to six-year process.
BTIG analysts outlined why Stryker is acquiring the devices.
“On the surface, this would appear to be just another Stryker tuck-in acquisition from a well-worn playbook which has allowed Stryker to maintain its robust growth profile but the acquisition is worth noting because competitors have also targeted other soft tissue repair companies making the Artelon acquisition the third in recent series,” the analysts said.
The series includes Conmed’s takeover of Biorez in 2022 and Zimmer’s acquisition of Embody in 2023. Conmed and Zimmer were following the lead of Smith & Nephew, which bought Rotation Medical in 2017.
While Stryker did not release the terms of the acquisition, rivals structured deals with substantial milestone payments. For example, Conmed spent $85 million at the closing of its Biorez purchase, with $165 million in potential future payments, and Zimmer agreed to a $155 million deal, with an additional $120 million tied to regulatory and commercial markers over three years.
Zimmer has spoken positively about its deal without quantifying its impact, with CEO Ivan Tornos saying “we love what we’re seeing with our Embody soft tissue franchise” on an earnings call in May.
BTIG analysts wrote there are “tremendous growth opportunities ahead as companies expand utilization of these soft-tissue repair products further into foot and ankle markets beyond traditional sports medicine applications such as rotator cuff repair or anterior cruciate ligament reconstruction.”
Stryker to acquire soft tissue fixation developer Artelon
Stryker (NYSE: SYK)+ today announced it entered a definitive agreement to acquire all of the issued and outstanding shares of Artelon.
Artelon specializes in soft tissue fixation for the foot and ankle and sports medicine procedures. The acquisition is slated to strengthen Stryker’s offerings in the soft tissue fixation segment for ligament and tendon reconstruction.
Artelon designed its technology to enhance biological and mechanical ligament and tendon reconstruction. It has been used in over 60,000 implantations worldwide, according to the company.
“Artelon’s proven product portfolio and differentiated offerings will enhance our ability to innovate and serve our customers,” Tim Lanier, president of Stryker’s Trauma and Extremities division, said in a news release. “The addition of Artelon’s products to our already robust foot and ankle and sports medicine product portfolios will fuel our goal of establishing comprehensive offerings for customers in these segments. We share a common dedication to integrity, quality, and advancing the knowledge of healthcare providers to achieve the best clinical outcomes and rebuild patients’ lives.”
The financial details of the deal were not disclosed. The transaction is subject to customary closing conditions. Stryker and Artelon will continue operating as separate entities and proceed with business as usual until the transaction closes.
More about Artelon’s technology
The FlexBand Twist, FlexBand Solo, FlexBand Multi, and FlexBand Fix systems give orthopedic surgeons complete sets of tools and implants in a single-use, sterile blister. Each system targets specific indications.
Twist is the company’s first soft tissue fixation system. It has a twist-in anchor locking and a Mod cube for intraoperative adaptability. Artelon designed Twist as a non-inflammatory matrix that can be quickly integrated with regenerating connective tissue. The quick integration allows the FlexBand technology to share in tensile loading, protecting the healing construct and driving the mechanical stimulation required for tissue regeneration and remodeling. According to the company, the FlexBand matrix is replaced by “highly organized” type-1 collagen over 4-6 years.
Artelon’s Solo is a procedure kit with tap-in fixation for single ligament augmentation. The company designed the kit to reinforce a connective tissue repair or reconstruction. It helps simplify the tensioning step by offering the ability to auto-tension reinforce, the company says.
Multi is a comprehensive procedure kit with tap-in fixation for multiple ligament augmentation. It helps re-tension, reinforce and biologically restore multiple ligament structures with one system. It offers 24 cm of FlexBand technology for more complex reconstructions.
Fix is a scaled-down procedure kit with tap-in fixation for single ligament augmentation. It contains a 0.5 cm by 8 cm FlexBand and two anchors. According to Artelon, the smaller profile allows for a more streamlined system with “right-sized” instrumentation for augmenting soft tissues in the extremities.
In May 2023, Artelon raised $20 million in a Series B funding round for its joint instability treatment. The company planned to use the proceeds to fund commercial growth and clinical research while developing its proprietary Dynamic Matrix technology for musculoskeletal soft tissue reconstruction.