NuVasive To Acquire Ellipse Technologies
In a recent press release, San Diego, California-based NuVasive, Inc. announced that it will acquire Ellipse Technologies, Inc. (“Ellipse”), a privately held medical technology company based in Aliso Viejo, California. According to its website, NuVasive is the third largest medical device company in the global spine industry and is dedicated to innovation and development focused on minimally disruptive surgical products and procedures for the spine. Ellipse describes itself as an innovative company dedicated to the design, development, and successful commercialization of non-invasively adjustable, remote controlled implants for a broad spectrum of spinal and orthopedic applications.
The press release states that the acquisition builds on NuVasive’s reputation as the leading technology provider for spine procedure solutions by adding a “highly regarded, disruptive technology platform.” Specifically, a Medical Device and Diagnostic Industry article reports that the acquisition strategically adds two of Ellipse’s main products to NuVasive’s product portfolio – MAGEC and PRECICE – products that will help boost NuVasive’s international footprint, since 37% of Ellipse’s 2015 revenue came from overseas. According to Ellipse, MAGEC (shown to the right) is a non-invasively adjustable growing rod used to brace the spine during growth to minimize the progression of scoliosis, and PRECICE is an adjustable intramedullary nail used for limb lengthening of the femur and tibia.
In connection with the acquisition, Gregory T. Lucier, Chairman and CEO of NuVasive, stated:
NuVasive remains committed to adult deformity through our Integrated Global Alignment (iGA™) platform, and the acquisition of Ellipse will aggressively insert NuVasive into early onset and idiopathic scoliosis, an important and attractive part of the spinal deformity market for NuVasive where we have tremendous opportunities for accelerated growth.
Edmund J. Roschak, President and CEO of Ellipse, said:
Joining forces with NuVasive not only validates the promise of our technology, but provides us with the scale and resources necessary to realize our full potential.
The press release notes that the Boards of Directors of both companies unanimously approved the terms of the acquisition, which include a $380 million upfront cash payment as well as a potential $30 million milestone payable in 2017. The transaction is expected to close by the end of February 2016, subject to customary closing conditions and regulatory approvals.
FTC Approves Tornier and Wright Medical Merger
The U.S. Federal Trade Commission (FTC) recently issued a final order that conditionally approves the merger between Amsterdam, Netherlands-based Tornier N.V. and Memphis, Tennessee-based Wright Medical Group, Inc. Reuters reports that the all-stock transaction is valued at about $3.3 billion. Plans for the merger were first announced in October 2014, and approved by the shareholders of both companies in June 2015, subject to receipt of clearance by the FTC. Progress on the transaction was suspended when the FTC expressed concerns that the merger would reduce competition for total ankle replacements and total silicone rubber (silastic) toe replacements in the U.S. market.
The FTC’s Bureau of Competition enforces U.S. antitrust laws and works with the Bureau of Economics to investigate alleged anticompetitive business practices. On occasion, the Bureau urges the Commission to take law enforcement action. In this case, the FTC’s concerns were the final obstacle to the proposed merger. The recent final order, which follows a mandatory public comment period, settles the FTC’s allegations of anticompetitive behavior.
The order calls for Tornier to sell a portion of its U.S. assets and IP rights to Integra Lifesciences Corporation (NASDAQ: IART), a competitor in the U.S. orthopedics space, which is based in Plainsboro, New Jersey. The newly combined company will be required to provide Integra with ankle and toe replacement products for up to three years. Through this arrangement, the FTC seeks to foster competition in the affected market.
In addition to its upper and lower extremity portfolio, the merged companies will maintain a presence in the growing biologics market. Wright Medical recently obtained FDA approval on the Augment bone graft material (left), which is as an alternative to autograft in a variety of arthrodesis procedures. Tornier has developed a line of biologics that includes its BioFiber line of absorbable scaffolds and its Conexa reconstructive tissue matrix, both of which are used for soft tissue repair.
The U.S. market for cell-based therapies for musculoskeletal injuries (orthobiologics) is valued at over $1.5 billion and is expected to grow significantly in 2016. Other market participants in the orthobiologics space include Dublin, Ireland-based Medtronic (NYSE: MDT), San Diego, California-based NuVasive (NASDAQ: NUVA), Kalamazoo, Michigan-based Stryker (NYSE: SYK), and Johnson and Johnson’s West Chester, Pennsylvania-based DePuy Synthes (NYSE: JNJ). Orthobiologics are part of the growing field of regenerative medicine, which includes bioprinting and stem-cell based therapies, and is projected to be worth $6.5 billion in the U.S. by 2019. Bioprinting, itself, has received recent investment and growth.
Following the merger, the resulting company will be renamed Wright Medical Group, N.V. and will be incorporated and headquartered in the Netherlands.
NuVasive Receives First-Ever 510(k) Clearance for a Cervical Corpectomy Cage
Spinal device specialist NuVasive recently received section 501(k) FDA clearance for its X-Core Mini Cervical Expandable VBR System, a titanium vertebral-body replacement device used in the cervical spine to replace vertebral bodies damaged by tumors, fractures, or osteomyelitis.
According to NuVasive’s FDA filing, the X-Core Mini system can also be used for reconstruction following a corpectomy or to restore the integrity of the spinal column without resorting to spinal fusion in patients that have short life expectancies due to advanced-stage tumors involving the cervical spine. The X-Core Mini system is available in a variety of sizes and shapes to accommodate differences in individual patients’ physical characteristics and pathology.
NuVasive states that the X-Core Mini must be used with supplemental fixation that has previously been cleared by the FDA for use in the cervical spine, which includes NuVasive’s new Archon Reconstruction Corpectomy plate. This plate is designed to increase rigidity and to resist screw pullout.
In a company news release NuVasive’s President and Chief Operating Officer, Pat Miles, stated:
The assembly of best-in-class cervical products into a cohesive procedural offering further reinforces NuVasive’s commitment to providing single-source, integrated procedural solutions to our customers. Combining X-Core Mini VBR and Archon Reconstruction plate provides another excellent example of defining the components necessary to properly address an unmet market need as NuVasive remains focused on becoming number one in spine.
According to Fierce Medical Devices, NuVasive became the third-largest competitor in the spinal device market last year. NuVasive maintains an active patent portfolio to help protect its market share: the USPTO Assignment Database lists NuVasive as the Assignee of 325 patents and patent applications dating from 1999 to the present.
Final Decision in NuVasive’s Inter Partes Review of Warsaw Orthopedic Patent
The Patent Trial and Appeals Board (the “Board”) recently issued Final Written Decisions disposing of two inter partes reviews that NuVasive filed in mid-2013 regarding U.S. patent number 8,444,696 (the ’696 Patent). The ’696 Patent is entitled “Anatomic spinal implant having anatomic bearing surfaces” and, according to its abstract, “is directed to an interbody spinal implant having a structural configuration that provides for maintaining the normal anatomic relationship of two adjacent vertebrae of the spine.” According to the USPTO Assignment Database, the patent application that later became the ’696 patent was assigned on May 17, 2005 by its inventor to SDGI Holdings, Inc., then was assigned on April 28, 2006 by SDGI Holdings, Inc. to Warsaw Orthopedic, Inc.
In its recent Final Written Decision disposing of IPR2013-00395, the Board determined that NuVasive showed by a preponderance of the evidence that claims 1–6 of the ’696 Patent are unpatentable under 35 U.S.C. § 103(a) as obvious over the combination of three references, Michelson, Wagner, and Brantigan. In its recent Final Written Decision disposing of IPR2013-00396, the Board determined that NuVasive showed by a preponderance of the evidence that claims 7-12 of the ’696 Patent are unpatentable under 35 U.S.C. § 103(a) as obvious over a different combination of three references, including Steffee, Michelson, and Kim.
On August 17, 2012, Warsaw Orthopedic, Medtronic Sofamor Danek, Medtronic Puerto Rico, and Osteotech filed a complaint against NuVasive alleging infringement of U.S. patents numbers 8,021,430 and 5,676,146. In its two petitions for inter partes review, NuVasive stated that Warsaw Orthopedic asked the Court for permission to add the ’696 patent to the lawsuit. On July 24, 2013 Warsaw’s request was granted.
NuVasive Files for Inter Partes Review of Warsaw Orthopedic’s Spinal Implant Patent
On June 27, 2013, NuVasive, Inc. filed two petitions with the Patent Trial and Appeal Board requesting inter partes review of Warsaw Orthopedic, Inc.’s U.S. Patent No. 8,444,696.
The ’696 Patent is entitled “Anatomic Spinal Implant Having Anatomic Bearing Surfaces.” The ’696 Patent relates to “an interbody spinal implant having a structural configuration that provides for maintaining the normal anatomic relationship of two adjacent vertebrae of the spine.” Figure 1 from the ’696 Patent is shown below:
The ‘696 Patent has 19 issued claims. The first petition (IPR2013-00395) seeks review of claims 1-6, and the second petition (IPR2013-00396) seeks review of claims 7-12. The petitions also identify a lawsuit between NuVasive and Warsaw Orthopedic that is currently pending in the Southern District of California, and state that Warsaw Orthopedic has asked the Court for permission to add the ’696 Patent to that lawsuit. Warsaw’s original complaint in that lawsuit, filed on August 17, 2012, alleges infringement by NuVasive of U.S. Patent Nos. 8,021,430 and 5,676,146.
AngleFix Tech, LLC Sues Wright Medical Technology, Inc.
On June 10, 2013, AngleFix Tech, LLC sued Wright Medical Technology, Inc. in the Western District of Tennessee. AngleFix’s complaint alleges that Wright Medical’s plate and screw systems for bone fixation infringe U.S. Patent No. 6,955,677 entitled “Multi-Angular Fastening Apparatus and Method for Surgical Bone Screw/Plate Systems.” The accused systems include the Claw, Claw II, Charlotte Claw, Ortholoc, Ortholoc 3Di, and Ortholoc 3Di2.
The complaint states that the ‘677 Patent was the result of the inventor’s “desire to capture bone fragments during orthopedic surgery that would otherwise evade locking screws set at a single fixed angle.” The Abstract of the ‘677 Patent describes an apparatus including a fastener and a fastener receiving member that “enables the fastener to be affixed to the fastener receiving member at a variable insertion angle selected by the user.” Figure 3 from the ‘677 Patent is shown below:
AngleFix is based in North Carolina and holds an exclusive license to the ‘677 Patent from the University of North Carolina. AngleFix sued NuVasive, Inc. on the same patent in the Southern District of California earlier this year.
NuVasive Files 2 Petitions for Inter Partes Review of Warsaw Orthopedic Patent
San Diego-based NuVasive, Inc. filed two petitions last Friday with the Patent Trial and Appeal Board for inter partes review of Medtronic subsidiary Warsaw Orthopedic, Inc.’s U.S. Pat. No. 8,251,997. The sole listed inventor of the ‘997 patent is Dr. Gary Michelson.
The ‘997 patent is entitled “Method for Inserting an Artificial Implant Between Two Adjacent Vertebrae Along a Coronal Plane” and “relates generally to instrumentation and methods of performing surgical procedures on the human thoracic and lumbar spine along the lateral aspect of the spine and from a true lateral or anterolateral approach, and specifically to the surgical correction of thoracic and lumbar disc disease and spinal deformities where concomitant fusion is desired.” Figure 13 from the ‘997 patent is shown below:
NuVasive’s first and second petitions collectively seek review of all 30 of the claims of the ‘997 patent, asserting the claims are obvious over a number of references. The associated exhibits can be found by visiting the Board’s website, entering the patent number 8251997, and clicking on the Search button.
Medtronic and NuVasive have a history of spinal patent infringement litigation. In 2008, Medtronic filed a patent lawsuit against NuVasive relating to spinal implants, and NuVasive filed patent infringement counterclaims. The first phase of this litigation went to trial in 2011, where Medtronic won $101 million in damages and NuVasive won $660,000, and is still ongoing.
Of note, the ‘997 patent, among others, was asserted by Warsaw against NuVasive in another pending patent infringement lawsuit originally filed in the Northern District of Indiana. The case has since been transferred to the Southern District of California. Warsaw’s alleged infringement contentions against NuVasive with respect to the ‘997 patent can be found here.
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