Blueprint
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of
1934
March 12, 2019
Commission
File Number 001-14978
SMITH & NEPHEW
plc
(Registrant's
name)
15 Adam
Street
London, England WC2N 6LA
(Address
of registrant's principal executive offices)
[Indicate
by check mark whether the registrant files or will file
annual
reports
under cover Form 20-F or Form 40-F.]
Form
20-F
X
Form 40-F
---
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[Indicate
by check mark if the registrant is submitting the Form 6-K
in
paper
as permitted by Regulation S-T Rule 101(b)(1).]
Yes
No X
---
---
[Indicate
by check mark if the registrant is submitting the Form 6-K
in
paper
as permitted by Regulation S-T Rule 101(b)(7).]
Yes
No X
---
---
[Indicate
by check mark whether by furnishing the information
contained
in this
Form, the registrant is also thereby furnishing information to
the
Commission
pursuant to Rule 12g3-2 (b) under the Securities Exchange Act
of
1934.]
Yes
No X
---
---
If
"Yes" is marked, indicate below the file number assigned to
the
registrant
in connection with Rule 12g3-2 (b) : 82- n/a.
Smith & Nephew expands in high growth regenerative medicine
market through acquisition of Osiris Therapeutics, Inc
12 March 2019
Smith & Nephew plc (LSE:SN, NYSE:SNN), the global medical
technology business, announces that it has agreed to acquire Osiris
Therapeutics, Inc. (NASDAQ: OSIR), a fast growing company
delivering regenerative medicine products, including skin, bone
graft and articular cartilage substitutes, for $19.00 per share in
cash, representing a total equity value of approximately
$660 million.
Namal Nawana, Chief Executive Officer, Smith & Nephew,
said:
"Greater presence in the fast growing regenerative medicine market
enhances our portfolio and will help immediately accelerate our
wound management business as well as provide longer term
innovations in additional channels and indications. We sought out a
fast growing portfolio with strong clinical evidence addressing
critical needs in the marketplace."
Osiris delivered revenue of $102 million for the nine-months ended
30 September 2018, an 18.7% increase over the comparable
period in 2017. Revenue was $36.5 million for the three-month
period ended 30 September 2018, a 22.4% increase year on year.
Osiris is expected to publish its Fourth Quarter and Full Year 2018
results on 15 March 2019.
Osiris' principal products, Grafix® and
Stravix®,
accounted for more than 70% of revenue in the first nine months of
2018, and drove the majority of growth. We expect these two
products to continue to deliver strong double-digit growth into the
medium term. Grafix and Stravix participate in the US skin
substitute market, which is currently worth $900 million per annum
and growing at 7% annually1.
Skin substitute Grafix is a cryopreserved placental membrane
intended for application directly to acute and chronic wounds,
including wounds with exposed bone and tendon. Grafix is supported
by robust evidence including two randomised controlled trials, six
non-randomised trials and more than 20 peer-reviewed publications
in the last 5 years. In October 2018, Osiris launched Grafix PL
PRIME, a lyopreserved product that can be stored at room
temperature, improving usability for healthcare
professionals.
Stravix is a cryopreserved placental tissue used as a surgical
cover or wrap to support soft tissue repair in a wide range of
surgical procedures.
Simon Fraser, President, Advanced Wound Management at Smith &
Nephew, said: "Grafix offers a compelling new option for managing
hard to heal wounds and Stravix expands our tissue repair
portfolio. We will drive synergies across products from common
call points and increased access to our wider customer
base."
Osiris also offers BIO4® bone
matrix for bone repair and Cartiform®,
an allograft for articular cartilage repair, products currently
exclusively distributed by third parties.
Peter Friedli, Chairman and co-founder of Osiris, said: "I am
immensely proud of the business we have built from our research
into advanced regenerative technologies. Smith & Nephew is the
best new owner to take these products forward, widening access to
more customers and restoring quality of life for more
patients."
Osiris' 360 employees are expected to join Smith & Nephew on
completion.
Transaction details
Under the terms of the transaction, Smith & Nephew will
commence a two-step tender offer to purchase all of the outstanding
shares of Osiris common stock for $19.00 per share in
cash.
The purchase price represents a 37% premium over the 90-day volume
weighted average price of Osiris' shares prior to this
announcement.
Peter Friedli has entered into a Tender & Support Agreement
with Smith & Nephew whereby he will commit to tender
approximately 30% of the outstanding shares of Osiris in favour of
the transaction.
The companies expect to close the transaction in the second quarter
of 2019, subject to customary closing conditions, including
relevant antitrust clearances and the tender of a majority of
outstanding shares of Osiris common stock on a fully diluted
basis.
The acquisition will be financed from Smith & Nephew's existing
cash and debt facilities. The transaction is expected to be
accretive to Smith & Nephew's adjusted earnings per share from
2020. The acquisition is expected to generate a return on invested
capital that exceeds Smith & Nephew's cost of capital in the
third year after closing.
ENDS
Analyst conference call
An analyst conference call to discuss Smith & Nephew's
acquisition of Osiris will be held today, Tuesday 12 March at
2.30pm GMT / 10.30am EST / 7.30am PST. The details can be found on
the Smith & Nephew website at: http://www.smith-nephew.com/investorpresentations/
Enquiries
Investors
Andrew
Swift
+44 (0) 20 7960 2285
Smith & Nephew
Media
Charles
Reynolds
+44 (0) 1923 477314
Smith & Nephew
Ben Atwell/ Andrew
Ward
+44 (0) 20 3727
1000
FTI Strategic Consulting
References
1.
SmartTrak Market Research
About Smith & Nephew
Smith & Nephew is a portfolio medical technology business with
leadership positions in Orthopaedics, Advanced Wound Management and
Sports Medicine. Smith & Nephew has more than 16,000 employees
and a presence in more than 100 countries. Annual sales in 2018
were $4.9 billion. Smith & Nephew is a member of the FTSE100
(LSE:SN, NYSE:SNN). For more information about Smith & Nephew,
please visit our corporate website www.smith-nephew.com and
follow us on Twitter, LinkedIn or Facebook.
About Osiris Therapeutics, Inc
Osiris Therapeutics, Inc., based in Columbia, Maryland, researches,
develops, manufactures and commercializes regenerative medicine
products intended to improve the health and lives of patients and
lower overall healthcare costs. It has achieved commercial success
with products in orthopedics, sports medicine and wound care,
including the Grafix product line, Stravix®,
BIO4® and
Cartiform®.
It continues to advance its research and development by focusing on
innovation in regenerative medicine, including the development of
bioengineered stem cell and tissue-based products. Osiris®,
Grafix®,
GrafixPL®,
GrafixPL PRIME Cartiform®,
and Prestige Lyotechnologysm are all its trademarks.
BIO4® is
a trademark of Howmedica Osteonics Corp., a subsidiary of Stryker
Corporation. More information can be found on the Company's
website, www.Osiris.com. (OSIR-G)
Cautionary Statement Regarding Forward-looking
Statements
This press release contains forward-looking information related to
Smith & Nephew, Osiris and the proposed transaction that
involves substantial risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
by such statements. These forward-looking statements generally
include statements that are predictive in nature and depend upon or
refer to future events or conditions, and include words such as
"believes," "plans," "anticipates," "projects," "estimates,"
"expects," "intends," "strategy," "future," "opportunity," "may,"
"will," "should," "could," "potential," or similar
expressions. Forward-looking statements in this press release
include, among other things, statements about the potential
benefits of the proposed transaction, including expected synergies,
the expected timing of completion of the proposed transaction,
anticipated earnings accretion, as well as Smith & Nephew's
plans and expectations and Osiris' financial condition, results of
operations, products and businesses. Forward-looking statements
involve known and unknown risks, uncertainties and other important
factors that could cause actual results to differ materially from
what is expressed or implied by the statements. These
forward-looking statements may be affected by risks and
uncertainties, including, without limitation, the risk that the
proposed transaction will not close when expected or at all; the
risk that the conditions to the tender offer will not be satisfied
in the anticipated timeframe or at all, including uncertainties as
to how many of Osiris' stockholders will tender their shares in the
tender offer; risks related to the ability to realize the
anticipated benefits of the proposed transaction, including the
possibility that its expected benefits and synergies will not be
realized or will not be realized within the expected time period;
negative effects of the announcement or consummation of the
proposed transaction on the market price of Smith & Nephew
shares and its operating results; the risk that Smith &
Nephew's and Osiris' business will be adversely impacted during the
pendency of the proposed transaction; the risk that the operations
of the two companies will not be integrated successfully; unknown
liabilities; and the risk of litigation and regulatory actions
related to the proposed transaction. Additionally, for Smith
& Nephew, these factors include: economic and financial
conditions in the markets we serve, especially those affecting
health care providers, payers and customers; price levels for
established and innovative medical devices; developments in medical
technology; regulatory approvals, reimbursement decisions or other
government actions; product defects or recalls or other problems
with quality management systems or failure to comply with related
regulations; litigation relating to patent or other claims; legal
compliance risks and related investigative, remedial or enforcement
actions; disruption to our supply chain or operations or those of
our suppliers; competition for qualified personnel; strategic
actions, including acquisitions and dispositions, our success in
performing due diligence, valuing and integrating acquired
businesses and disruption that may result from transactions or
other changes we make in our business plans or organisation to
adapt to market developments; and numerous other matters that
affect us or our markets, including those of a political, economic,
business, competitive or reputational nature. Please refer to the
documents that Smith & Nephew has filed with the U.S.
Securities and Exchange Commission (the "SEC") under the U.S.
Securities Exchange Act of 1934, as amended, including Smith &
Nephew's most recent annual report on Form 20-F, for a discussion
of certain of these factors. Any forward-looking statement is based
on information available to Smith & Nephew as of the date of
the statement. All written or oral forward-looking statements
attributable to Smith & Nephew are qualified by this caution.
Smith & Nephew does not undertake any obligation to update or
revise any forward-looking statement to reflect any change in
circumstances or in Smith & Nephew's expectations.
◊Trademark of Smith &
Nephew. Certain marks registered US Patent and Trademark
Office.
Additional Information about the Proposed Transaction and Where to
Find It
The tender offer
described in this press release has not yet commenced. This press
release is provided for informational purposes only and does not
constitute an offer to purchase or the solicitation of an offer to
sell any securities. At the time the tender offer is commenced,
Smith & Nephew, Smith & Nephew Consolidated, Inc. and a
wholly owned subsidiary of Smith & Nephew intend to file with
the SEC a Tender Offer Statement on Schedule TO containing an offer
to purchase, a form of letter of transmittal and other documents
relating to the tender offer, and Osiris intends to file with the
SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the tender offer. Smith & Nephew and Osiris intend
to mail these documents to the Osiris stockholders. Investors and
stockholders should read those filings carefully when they become
available as they will contain important information about the
tender offer. Those documents may be obtained without charge at the
SEC's website at www.sec.gov or
by contacting the information agent for the tender offer. INVESTORS
AND SECURITY HOLDERS ARE ADVISED TO READ THESE DOCUMENTS WHEN THEY
BECOME AVAILABLE, INCLUDING THE SOLICITATION/RECOMMENDATION
STATEMENT OF OSIRIS AND ANY AMENDMENTS THERETO, AS WELL AS ANY
OTHER DOCUMENTS RELATING TO THE PROPOSED TRANSACTION THAT ARE FILED
WITH THE SEC, CAREFULLY AND IN THEIR ENTIRETY PRIOR TO MAKING ANY
DECISIONS WITH RESPECT TO WHETHER TO TENDER THEIR SHARES PURSUANT
TO THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT
INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE PROPOSED
TRANSACTION
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Smith
& Nephew Plc
(Registrant)
Date: March
12, 2019
By: /s/
Susan Swabey
-----------------
Susan
Swabey
Company
Secretary