Smith+Nephew (SNN) to Acquire Orlando-Based Engage Surgical

·4-min read

Smith+Nephew SNN recently acquired Orlando, FL-based Engage Surgical, the owner of the only commercially available cementless unicompartmental (partial) knee system in the United States. This buyout strengthens Smith+Nephew’s growth strategy by transforming its business via innovation and acquisition, and offering differentiation for its customers. The acquisition costs nearly $135 million, depending on sales performance. It was financed through Smith+Nephew’s existing cash and debt facilities.

The Engage Surgical Partial Knee System is a modern cementless knee implant designed to serve a resurgent segment led by the possibility of superior long-term fixation through biologic integration, shorter operating periods and shift to Ambulatory Surgery Centers (ASCs).

With this acquisition, Smith+Nephew is currently the only medical device company in the United States that offers both cemented and cementless partial knee implants as well as robotics-assistance (with the CORI Surgical System).

The Engage Surgical buyout is likely to bolster Smith+Nephew’s Orthopaedic Reconstruction product line. It is also expected to drive the company’s Robotics and Real Intelligence strategy.

Strategic Benefits of the Buyout

Partial knee procedures are well-suited for robotics and Smith+Nephew’s CORI Surgical System already supports the cemented JOURNEY II unicompartmental knee. It is worth noting that the Engage Surgical Partial Knee System has been optimized for robotics and is likely to be integrated with the CORI in the future. With a rising proportion of knee procedures performed in ASCs, Engage Surgical's Partial Knee System complements the company’s focus on serving the high-growth outpatient market.

Smith+Nephew also anticipates the Engage Surgical’s Partial Knee System to drive market expansion in the United States and other markets as regulatory approvals are obtained with time. The Engage Surgical’s Partial Knee System has received regulatory approval in the United States, where it is available in a limited market release at present.

Management at Smith+Nephew anticipates cementless partial knees to outpace overall partial knees in terms of growth.

Industry Prospects

Per a report published in TechNavio, the cementless total knee arthroplasty market is expected to see a CAGR of 21.89% during 2021-2025 on account of an increasing number of individuals diagnosed with arthritis. Given the market prospects, Smith+Nephew’s Engage Surgical buyout comes at an opportune time.

Notable Developments

Smith+Nephew engaged in a number of significant developments in November 2021.

The company launched its Real Intelligence brand of enabling technology solutions as well as its next-generation handheld robotics platform, the CORI Surgical System, in Canada. The CORI Surgical System has been approved by Health Canada and is available for sale in the country.

The company announced the creation of a purpose-built digital surgery and robotics innovation center in Munich, Germany. The new innovation center will bring together healthcare professionals from EMEA and Smith+Nephew’s R&D and medical education teams to research digital surgery and robotics techniques and technologies.

Competitive Niche

The knee implant market is competitive with the presence of prominent MedTech players.

In this regard, Conformis, Inc. CFMS reported strong findings from a published retrospective study of procedures performed with the company’s patient-specific iTotal CR (cruciate-retaining) knee replacement implant. The retrospective study assessed patient records and conducted patient report outcome surveys on patients undergoing personalized total knee arthroplasty. The clinical study findings demonstrated 98.5% implant survivorship and 89.0% patient satisfaction for the Conformis patient-specific iTotal CR (cruciate-retaining) knee replacement implants during mid-term follow-up.

Johnson & Johnson’s JNJ company, DePuy Synthes, unveiled the ATTUNE Cementless Fixed Bearing Knee with AFFIXIUM 3DP Technology, among other orthopaedics products and technology solutions, at the American Academy of Orthopaedic Surgeons annual meeting. The ATTUNE AFFIXIUM Knee is the next generation of ATTUNE Knee implants, intended for a growing population of more active patients. Its technology features an advanced 3D printed-porous structure for improved initial implant stability and promotion of bone ingrowth.

Zimmer Biomet Holdings, Inc. ZBH and Canary Medical announced the FDA De Novo classification grant and authorization to market the tibial extension for Persona IQ. The Persona IQ Knee Implant combines Zimmer Biomet's knee implant called, Persona The Personalized Knee, with Canary Medical's proprietary implantable canturio te tibial extension sensor technology. The Persona IQ is the first and only smart knee to have been authorized by the FDA for total knee replacement surgery.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Smith & Nephew SNATS, Inc. (SNN) : Free Stock Analysis Report
Zimmer Biomet Holdings, Inc. (ZBH) : Free Stock Analysis Report
ConforMIS, Inc. (CFMS) : Free Stock Analysis Report
To read this article on click here.