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news.NuVasive, a medical device company engaged in developing products for surgical treatments for the spine, has agreed to purchase Cervitech, a New Jersey-based company.
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The strategic acquisition allows NuVasive the potential to accelerate its entry into the growing mechanical cervical disc replacement market, said NuVasive.
The initial payment for purchase of Cervitech will be approximately $47 million, with an additional contingent payment of $33 million upon FDA approval of the device. At NuVasive’s discretion, all payments may be made in up to 50% NuVasive stock.
Currently, Cervitech’s PCM investigational device is in an FDA-approved clinical trial in the US and two year follow up is scheduled to be completed in the fourth quarter of 2009. NuVasive anticipates submitting for FDA approval in the first quarter of 2010. The company expects modest sales outside the US in the near term, with product revenue of $100 million annually within three years of US commercialization.
Alex Lukianov, chairman and CEO of NuVasive, said: “The PCM investigational device has the potential to significantly accelerate NuVasive’s entry into this important market. Cervitech is running an impressive clinical trial and the published clinical data verifies that the PCM offers significant benefits to patients. The potential approval will further strengthen our cervical product offering and will enable us to continue our trend of taking market share.”