Minnesota’s Synovis Life Technologies Inc. said it has hired 25 workers as one of the first steps in re-establishing a soft tissue repair product business in Irvine.
Synovis bought the assets of Pegasus Biologics Inc. for $12 million in July. Synovis, which makes tissue products that are used in obesity, hernia and breast reconstruction surgeries, is integrating Pegasus’ assets and has renamed the unit Synovis Orthopedic and Wound Care Inc.
Pegasus made implants out of horse collagen that were used to repair muscles, tendons and other soft tissue. Its products included the OrthAdapt Bioimplant, which was used to repair rotator cuffs and Achilles’ tendon injuries, and the Unite Biomatrix, which treated chronic wounds such as diabetic foot ulcers and pressure ulcers.
Pegasus, which started in 2003, had raised more than $38 million in venture capital and other funding. It abruptly ceased operations in May after it was unable to raise more money.
Synovis appeared to buy Pegasus for a fire sale price, or about 30% of what it had raised in venture funding.
Synovis said that it would retain local manufacturing operations and plans to start its manufacturing and sales efforts for Synovis Orthopedic this quarter.
On Synovis’ recent quarterly earnings call, Chief Executive Richard Kramp said buying Pegasus’ assets gave the company “immediate access” to orthopedic and wound care markets with a total yearly potential of $985 million.
Synovis, which had a recent market value of $150 million, also will benefit by offering horse tissue-based implants and wound dressings in overseas markets, Kramp said.
Horse tissue products don’t seem to raise the same political, cultural, religious and health concerns that products made from cow tissue do in some countries, according to Kramp.
“For example, Japan, Taiwan and other Asia Pacific countries have barriers to the use of bovine tissue and China will not allow most U.S.-sourced beef products, including bovine tissue, to be implanted,” Kramp said.
The Pegasus product portfolio will be a strong strategic fit for Synovis in the long term, said Matt Dolan, a senior research analyst with Roth Capital Partners LLC in Newport Beach, in a report.
Synovis Orthopedic’s sales will largely depend on two factors: Getting a manufacturing license from the California Department of Public Health so the company can repackage Pegasus’ products with Synovis labeling, as well as getting former Pegasus accounts back on board, according to Dolan.
The manufacturing license should come through some time in October, Dolan said.
Some customers have called Synovis and asked it when Pegasus products will return to the market, according to Kramp.
“They’ve had positive experiences,” Kramp said. “They are willing to take it back when it comes.”
Edwards Enrolling for Trial
Edwards Lifesciences Corp., an Irvine maker of heart valves and other devices, said earlier this month that it finished enrollment in its 1,040-patient trial for its less-invasive Sapien heart valve.
The Food and Drug Administration gave conditional approval to enroll patients in the trial.
Sapien, which is inserted via a catheter, and other less-invasive valves are seen as the most promising advance in the field in years and could open up the market for patients who aren’t able to have traditional open-heart surgery.
Edwards said it plans to present clinical data on Sapien at the upcoming Transcatheter Cardiovascular Therapeutics scientific symposium in San Francisco, which begins Sept. 21.
Separately, Edwards said it completed the sale of its hemofiltration product line, which helps patients with malfunctioning kidneys, to former parent Baxter International Inc. of Deerfield, Ill., for $65 million. Edwards originally announced the deal in June and said it was selling the business in order to focus on “global strategic priorities.”
Baxter, which spun off Edwards in 2000, supplies solutions used with the hemofiltration devices, which are used to mimic kidney function 24 hours a day for patients who have life-threatening kidney injuries or fluid overload.
Bits and Pieces:
St. Jude Medical Center in Fullerton said its laboratory received recognition from Beckman Coulter Inc., a Fullerton-based biomedical testing company, for receiving a 99.9% error-free rate analyzing patients’ blood samples … Mobile MedCheck, a company that provides medical testing directly to patients’ homes and offices, recently opened in Tustin. Mobile MedCheck uses doctors, nurses and medical technicians to provide preventive health screenings, tests for sexually transmitted diseases, tests for life insurance and drug screening … EDI Health Group Inc., an Irvine maker of dental claims software, hosted a forum last month where participants talked about improving operational efficiencies and service quality between dentists and insurance companies.
