Devicemaker Smith & Nephew ($SNN) is hiving off its biologic drugs division. The biologics business will become a joint venture majority-owned by the private equity firm Essex Woodlands; in return, S&N gets $98 million in upfront cash, plus a 5-year, $160 million note.
Dubbed Bioventus, the JV will continue to market S&N's orthopedic drug treatments, including Exogen for bone healing. The products brought in $223 million in 2010 sales, but S&N hasn't been investing much in building up its product stable. The deal offers more resources for Bioventus to do just that. And it gives the devicemaker some cash to pay down debt.
"In a single act, we have given our existing biologics business the resources to address longer-term development projects, retained access to the exciting area of orthobiologics, realized value for investment in nearer-term opportunities, and freed up management resources to focus driving efficiencies in established markets," S&N CEO Olivier Bohuon said in a statement.