The Medical Technology Blog

Kensey Nash finds way in to regenerative medicine market through Nerites takeover

Kensey Nash, a company focused on regenerative medicine via its collagen and synthetic polymer technologies, has snapped up Nerites, a Madison, WI-based developer of metal adhesives and anti-fouling coatings. The purchase was made for US$20 million in cash.

Right now, Nerites is developing a platform for adhesive-based biomaterials that Kensey Nash thinks would help it enter the regenerative medicine market, which covers soft tissue repair, orthopaedics, sports medicine, spine and neurosurgery. Surgical sealants can be used in most procedures, and over the past few years the wound closure market has moved from staples and sutures to a new generation of technologies, including a range of external and internal surgical adhesives. These products compete in a market that serves over 70 million surgical wounds in the US alone. The market is estimated to be worth over US$1 billion by 2015.

As well as new surgical sealants and adhesives, Kensey Nash says it wants to develop and integrate the acquired adhesive, sealant and coating technologies into its Regenerative Biomaterials business. The firm believes that through this technology it can develop a portfolio of next-generation hybrid adhesive-based products that integrate its ECM, collagen and polymer technologies for use in general, neurologic, plastic/reconstructive, orthopaedic, urologic, cardiovascular and thoracic surgical specialties. The company first intends to develop products for repairing defects in abdominal walls, dural membranes and gastro-intestinal tracts.

Kensey Nash also wants to look at applications for the Nerites anti-fouling technology for preventing bacterial biofilm formation. Biofilms form when micro-organisms attach to implanted medical devices, and form a biological film coating that can interrupt healing, and cause infection. It is thought hat device-related biofilm infections can increase hospital stays and add over US$1 billion per year to US hospitalisation costs.

According to Nerites, its technology is inspired by proteins secreted by marine mussels for bonding to underwater surfaces. Research carried out on these adhesive proteins by Dr Phillip Messersmith of Northwestern University identified a key compound believed to be primarily responsible for the adhesive properties. Synthetic versions of these components have been developed to create biomaterials capable of binding to tissue and other materials in aqueous surgical environments. Nerites has funded the activities through US$11 million from venture capital and private investors, as well as an additional US$5 million in NIH and NSF SBIR grants.

Though the loose ends of the transaction have not yet been tied up, Kensey Nash thinks the purchase will be dilutive to earnings by around US$0.02 per share in the second half of 2011, and expects that in 2012, it will have a neutral impact on earnings, as any R&D spending on the Nerites technology will be reallocated from other projects.

Thanks to Sophie Bracken for this article, Sophie is  the editor for Orthopaedic Business News

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