Parcus Medical 
Arthrosurface
– Anika Therapeutics announced plans to acquire Parcus Medical, a privately-held sports medicine company, and Arthrosurface, a privately-held provider of joint surface and preservation solutions for active patients.
– These acquisitions will significantly enhance Anika’s commercial capabilities and infrastructure, diversify its revenue mix and expand its product portfolio and pipeline.
– Additionally, it will solidify Anika’s position in the $7 billion sports and regenerative medicine market and strengthen its ability to deliver better patient experiences and drive sustained revenue growth.
Anika Therapeutics, Inc., a global, integrated joint preservation and regenerative therapies company with products leveraging its proprietary hyaluronic acid (HA) technology platform, today announced it has signed agreements to acquire both Parcus Medical, a leading, privately-held sports medicine company, and Arthrosurface, a leading, privately-held provider of joint surface and preservation solutions for active patients.
4 Implications Driving Parcus Medical and Arthosurface Acquisitions
The company expects the Parcus Medical and Arthrosurface acquisitions to drive growth by:
1. Broadening Anika’s product portfolio into joint preservation and restoration
2. Adding high-growth and diversified revenue streams;
3. Strengthening its commercial capabilities with approximately 40 direct sales representatives and approximately 150 distributors in the U.S., as well as more than approximately 70 international distributors
4. Expanding its product pipeline and research and development expertise.
“We are very excited about these acquisitions, which are consistent with Anika’s commitment to expanding our portfolio into replacement and regenerative therapies for joint preservation and restoration,” said Joseph Darling, President and Chief Executive Officer of Anika Therapeutics. “These acquisitions will significantly enhance our commercial capabilities and infrastructure, diversify our revenue mix and expand our product portfolio and pipeline. Parcus Medical provides direct access to the high-growth ambulatory surgery center market, which will enable Anika to source new revenue streams, and Arthrosurface has an innovative product pipeline and an established direct hybrid sales model, which will accelerate our product platform strategy. Importantly, we are confident that these acquisitions, together with our existing product portfolio, will solidify Anika’s position in the $7 billion sports and regenerative medicine market and strengthen our ability to deliver better patient experiences and drive sustained revenue growth that will ultimately enhance value for shareholders.”
$35M Parcus Medical Acquisition
Parcus Medical has a diverse product family that helps facilitate surgical procedures on the shoulder, knee, hip and distal extremities. The acquisition of Parcus Medical will significantly expand Anika’s offerings into the fast-growing ambulatory surgical center (ASC) market. The Parcus Medical executive team, led by President Mark Brunsvold, will join Anika and continue to lead the Parcus Medical business.
“Together with Anika, we will continue our efforts to capitalize on the growing ASC market and reach more orthopedic surgeons with the products they rely on to care for patients,” said Mark Brunsvold, President of Parcus Medical. “We founded Parcus Medical with the belief that the future of healthcare would require a new balance between innovation, cost and product delivery. As we enter the next chapter for our company, we look forward to working closely with Joe and the Anika leadership team to continue to drive innovation across our portfolio.”
Financial Terms of Acquisition
Under the terms of the agreement, Anika will acquire all outstanding membership interests of Parcus Medical in exchange for an upfront payment of approximately $35 million in cash from the company’s existing balance sheet, subject to customary closing adjustments. In addition, Parcus Medical unitholders will be eligible to receive an additional $60 million contingent upon the successful achievement of certain commercial milestones. Parcus Medical is expected to generate approximately $12 million to $13 million of revenue for the full year of 2019, an increase of approximately 15 percent compared to the prior year.
$60M Arthrosurface Acquisition
Arthrosurface’s product portfolio includes more than 150 different surface implant curvatures for the knee, shoulder, hip, ankle, wrist and toe that are designed to treat upper and lower extremity orthopedic conditions caused by trauma, injury and arthritic disease. The Arthrosurface executive team, led by President and Chief Executive Officer Steven Ek, will join Anika and continue to lead the Arthrosurface business innovation.
Financial Terms of Acquisition
Under the terms of the agreement, Anika will acquire all outstanding shares of Arthrosurface in exchange for an upfront payment of approximately $60 million in cash from the company’s existing balance sheet, subject to customary closing adjustments. In addition, Arthrosurface shareholders will be eligible to receive an additional $40 million contingent upon successful achievement of certain regulatory and commercial milestones. Arthrosurface is expected to generate approximately $28 million to $30 million of revenue for the full year of 2019, an increase of approximately 10 percent compared to the prior year.
“Joining Anika will provide our team a larger platform and greater resources to bring innovative solutions to market and support healthcare professionals to provide better care to patients seeking treatments that will help them stay active and pain-free,” said Steven Ek, President and Chief Executive Officer of Arthrosurface. “Since our founding, we have treated more than 100,000 patients and we now have over 5,000 surgeons using our products across more than 25 countries. We are confident that this transaction will position our pipeline for success and help us extend our leadership in sports medicine.”
