This acquisition fits with TiGenix’ growth strategy of becoming a leading player in the promising and fast-growing field of regenerative medicine.
Orthomimetics was founded in 2005 as a spin-out from the University of Cambridge and the Massachusetts Institute of Technology (MIT). Its products are based on a leading collagen biomaterials platform for the production of scaffolds for cartilage, meniscus, ligament and tendon repair.
Orthomimetics’ flagship product, Chondromimetic™, is an off-the-shelf, resorbable implant for the minimally invasive repair of small osteochondral (cartilage and underlying bone) defects. The product has received European market approval (CE-Mark approval) and is close to entering the European market. Small osteochondral defects represent an important medical need that is currently not covered by TiGenix’ products. Chondromimetic™ forms an excellent fit with TiGenix’ lead product, ChondroCelect®, since both products target the same customer base in complementary indications.
The acquisition of Orthomimetics also broadens TiGenix biomaterials expertise. Orthomimetics’ technological advantage lies in the patent-protected ability to combine three natural biomaterials, collagen, glycosaminoglycans and calcium phosphate, into bioresorbable tissue regeneration scaffolds. The combination of Orthomimetics’ biomaterials know-how with TiGenix’ cell-based platform allows TiGenix to broaden its development focus towards regenerative medicine products for meniscus, tendon, and ligaments.
Under the terms of the acquisition, TiGenix will issue about 3.7 million new shares as consideration for the purchase of all outstanding shares of Orthomimetics. This values Orthomimetics at EUR 16 million (USD 23.8 million) on a debt and cash free basis. The new shares will be admitted to trading on the NYSE Euronext Brussels. The Orthomimetics shareholders agreed to a lock-up period until 31 October 2010 that could be lifted earlier with the prior written consent of TiGenix.
“This consolidation represents a natural extension of our core business strategy to provide the best regenerative medicine solutions to orthopaedic surgeons worldwide. The synergies between Chondromimetic™ and ChondroCelect® allow us to leverage our existing European infrastructure and commercial capabilities, and provide the opportunity to increase our near-term revenue growth with limited impact on our cash needs” comments Gil Beyen, CEO of TiGenix “The combination of these advantages and our expertise in developing cell-based therapeutic products creates a unique platform from which innovative future combination products can be developed.”