Wright Medical plans to expand its extremity orthopedic implant offerings by acquiring total ankle replacement-maker Inbone Technologies.

On March 7, Wright announced an agreement to buy Berkeley, Calif.-based Inbone for an initial cash payment of $24 million, plus guaranteed future payments of at least $3.7 million as well as additional earn-outs based on performance.

The Inbone deal is the latest in a line of extremity implant acquisitions for Wright. Wright's other foot and ankle products include the Charlotte line of stainless steel plates and screws, Swanson silicone digit implants,the Bioarch subtalar implant and Darco titanium locked plates and headed screws. The latter devices were gained in the March 2007 acquisition of Darco International (¹ Also see "Wright Expands Foothold In Extremities Market With Darco Purchase" - Medtech Insight, 12 March, 2007., p. 13).

Wright Medical "has been in the last several years really making themselves known in the extremity market," Inbone Marketing Director Cindy Bradfish told "The Gray Sheet." "They've got a full line of foot and ankle products and the total ankle was pretty much the only thing they've been missing."

Extremity implants make up 12% of Wright's revenue and the potential U.S. annual market for total ankles is $230 million, according to Wachovia analyst Michael Matson. Robert W. Baird analyst Jeff Johnson, however, estimates the current U.S. market for total ankles at $17 million and the potential U.S. market at about $70 million.

According to Wright and Inbone, the Inbone Total Ankle , 510(k) cleared in November 2005, provides a high level of alignment accuracy during surgery and a modular assembly process allows the ankle to be matched to patients with different anatomies.

Wright will also gain Inbone's fusion rod and plate system,launched in July 2007. The system includes a proprietary intramedullary guidance system that places the device completely inside the bone so it provides better fixation and faster healing than external plate implants, Inbone says.

Wright estimates that about 18,000 ankle fusions and 2,500 total ankle replacements are performed annually in the U.S. The firm predicts that total ankle replacement will supplant about half of those ankle fusions within five years.

The Inbone total ankle is also suited for revisions of failed total ankle implants, and repair of deformity caused by traumatic, degenerative or rheumatoid conditions, Wright says.

"Total ankle replacements are finally coming of age and the timing of this combination is at the inflection point when ankles are poised to garner widespread acceptance and growth because of the new design and technology," Inbone President and CEO Jeffrey Dunn said.

Newer Ankles Show Better Clinical Results

Wachovia's Matson says the Inbone ankle attempts to address the design shortcomings that have prevented older total ankle designs from achieving good clinical results or getting much traction in the market, he writes in a March 10 analyst note.

Baird's Johnson agrees that "survival rates with today's total ankle implants are, as a whole, much improved."

Other total ankle systems cleared in the U.S. include DePuy Orthopedics' Agility , Tornier's Salto Talaris and Integra/KMI's Eclipse . Small Bone Innovations/Waldemar Link's S.T.A.R. Ankle is under FDA review (² 'The Gray Sheet' Feb. 11, 2008, In Brief).

Wright reported sales of $103.2 million for the fourth quarter ended Dec. 31, up 19% from $86.6 million in the prior year period, driven by 61% global extremities growth, said CEO Gary Henley. U.S. extremity product sales jumped 54%.

Wright says it will begin distributing the Inbone product line through its U.S. distribution network immediately after the acquisition is finalized, and launch in select international markets when it obtains the required regulatory clearances.

Analysts expect the deal to close this summer and be accretive to earnings beginning in 2009.

- Jessica Bylander (j.bylander@elsevier.com)

Wright Medical Reaches Into Extremities Market With Inbone Acquisition

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