Essex Woodlands Announces Strategic Partnership with Smith & Nephew to Fund Spinout of Biologics and Clinical Therapies Division, Creating Leading Orthopedic Biologics Company

Jan 04 2012

HOUSTON, Texas – Essex Woodlands (, a global healthcare growth equity and venture capital firm, announced today a strategic partnership with Smith & Nephew (,  the largest UK-based medical device company, to fund the spinout of Smith & Nephew’s Biologics and Clinical Therapies division and develop a leading global orthopedic biologics company, Bioventus LLC (“Bioventus”).  The transaction is expected to be completed in the next several months.

“We are very excited about the formation of Bioventus and our strategic partnership with Smith & Nephew to advance innovation in orthobiologics,”  commented Marty Sutter, Founding Partner and Managing Director of Essex Woodlands.  “We applaud Smith & Nephew for their forward thinking in working with Essex Woodlands and our partners in this groundbreaking venture.  No one has created such a platform for innovation before”.  “The founding of Bioventus demonstrates Essex Woodlands’ strong commitment to our growth equity investment strategy”, Sutter emphasized. 

Essex Woodlands has previously established domain expertise and experience, and served as lead investor in founding and leading investments in the orthopedics and regenerative medicine space, including investments in Orthovita (acquired by Stryker in May 2011), St. Francis Medical (acquired by Kyphon in December 2006 and subsequently acquired by Medtronic in July 2007), Spinal Concepts (acquired by Abbott Laboratories in June 2003), Confluent Surgical (acquired by Covidien in July 2006), United Orthopedic Group and LifeCell (acquired by Kinetic Concepts in April 2008).  Since 1985, Essex Woodlands has served as the lead investor in the founding and critical financings of 120+ healthcare companies in the pharmaceutical, biotechnology, medical device, healthcare services and health information technology sectors. 

Focused on less invasive alternatives to traditional “hardware-based” surgical options, Smith & Nephew’s Biologics and Clinical Therapies Division’s product line includes the EXOGEN◊ Ultrasound Bone Healing System and hyaluronic acid joint fluid therapy products, SUPARTZ® and DUROLANE®, which treat the symptoms of osteoarthritis.  These advanced products provide clinical benefits to patients and cost savings to payers by delaying or eliminating the need for knee surgery or, in the case of bone stimulation, expensive follow-on procedures for bone fractures which do not heal.  With a 300+ member sales force, this business has experienced a significant growth of revenues from $52 million in 2004,  to $223 million in 2010, achieving trading profit of $44M. 
Olivier Bohuon, Chief Executive Officer of Smith & Nephew, said “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 reinvestment in nearer-term opportunities, and freed up management resources to focus on driving efficiencies in established markets.  Essex Woodlands are strong partners and the joint venture will benefit from their significant expertise in developing healthcare businesses.”

Essex Woodlands will invest a minimum of $60 million as part of $118 million of equity in return for a controlling 51% interest in Bioventus.  Pantheon Ventures, a Limited Partner of Essex Woodlands, and Spindletop Healthcare Capital may participate alongside Essex Woodlands in the investment.  Marty Sutter, Founding Partner and Managing Director of Essex Woodlands, Guido Neels, Managing Director of Essex Woodlands, and Dan Lemaitre, President and CEO of White Pine Medical, will join the Board of Directors of Bioventus.  Reed Smith LLP acted as legal counsel to Essex Woodlands for this transaction.

About Essex Woodlands
With over $2.5 billion under management, Essex Woodlands is one of the largest and oldest growth equity and venture capital firms pursuing investments in pharmaceuticals, biotechnology, medical devices, health care services, and health information technology. Since its founding in 1985, Essex Woodlands has maintained its singular commitment to the healthcare industry and has been involved in the founding, investing, and/or management of over 120 healthcare companies ranging across all sectors, stages and geography. The team is comprised of 25 senior investment professionals with offices in Palo Alto, Houston, New York and London.  For more information please see

About Smith & Nephew
Smith & Nephew is a global medical technology business with global leadership positions in Orthopaedic Reconstruction, Advanced Wound Management, Sports Medicine, Trauma and Clinical Therapies.  The Company has distribution channels, purchasing agents and buying entities in over 90 countries worldwide.  Annual sales in 2010 were nearly $4.0 billion. 
Smith & Nephew is dedicated to helping improve people’s lives.  The Company prides itself on the strength of its relationships with its surgeons and professional healthcare customers, with whom its name is synonymous with high standards of performance, innovation and trust.
◊Trademark of Smith & Nephew.  Certain marks registered US Patent and Trademark Office
DUROLANE® is a trademark of Q-Med AB.  SUPARTZ® is a trademark of the Seikagaku Corporation.