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Smith & Nephew BHR MDL, Recalls & News

Smith & Nephew BHR MDL, Recalls & News

For more information, please contact The Ahearne Law Firm, PLLC for an initial consultation and case evaluation. Call nationwide at (845) 986-2777.

Smith & Nephew is a global medical technology business with approximately 15,000 employees and a presence in more than 100 countries. Annual sales in 2016 were almost $4.7 Billion.

Multidistrict Litigation (MDL) and Recalls

As covered in our blog posts, the United States Judicial Panel on Multidistrict Litigation (JPML) created MDL 2775 (IN RE: Smith & Nephew Birmingham Hip Resurfacing (BHR) Hip Implant Products Liability Litigation) in April regarding the premature failure of the Smith & Nephew Birmingham Hip Resurfacing (BHR) System and R3 Acetabular System. The BHR was approved by the U.S. Food and Drug Administration (FDA) in May 2006 through its expedited Premarket Approval process for Class III medical devices, as one of the first metal-on-metal hip replacement systems on the market, designed relieve pain and improve hip joint function. Smith & Nephew has faced litigation involving its hip implants since 2010. The company later withdrew the BHR device from the U.S. market in June 2015 due to similar high failure rates, particularly in women and in patients with smaller hip joints.

Further, on August 29, 2016, Smith & Nephew recalled certain batches of its Tandem Bipolar Hip System in the United States due to a retainer groove that is out of specifications that can cause the artificial hip joint to disassemble, usually within the first few weeks of surgery. Also, in November 2016, Smith & Nephew recalled its Modular SMF and Modular Redapt hip implants “due to a higher than anticipated complaint and adverse event trend” with the modular necks used in the devices. Smith & Nephew also recalled the corresponding hip stem components.

Purchase of Rotation Medical

Smith & Nephew has agreed to acquire tissue regeneration company, Rotation Medical, for $125 million in cash upfront. Another $85 million is payable if certain financial milestones are achieved.

Rotation Medical is dedicated to transforming how rotator cuff tears are treated. The Plymouth, Minnesota-based company developed a collagen-based bioinductive implant derived from bovine Achilles tendon. About the size of a postage stamp, the implant is delivered arthroscopically. It is designed to foster the growth of new, tendonlike tissue in the rotator cuff and earned FDA clearance in 2014. The treatment boosts the body’s natural healing response and has the potential to stop tears from getting worse and reduce the likelihood of retears, Smith & Nephew said in a statement.

“Rotation Medical furthers our strategy to invest in disruptive technologies that accelerate the transformation of Smith & Nephew to higher growth,” said Smith & Nephew CEO Olivier Bohuon. “The Rotation Medical Rotator Cuff System is an innovative technology serving unmet clinical needs. It is highly complementary to our Sports Medicine portfolio and provides a compelling new treatment option for our customers.”

Smith & Nephew will sell the product through its sports medicine sales team, as well as through Rotation Medical’s sales force. The company also plans to file for regulatory approval in the EU.

“Since first commercialization in 2014, thousands of patients have benefited from the Rotation Medical technology,” said Rotation Medical CEO Martha Shadan in the statement. “We are proud of the impact our technology has made in healthcare and are excited by the opportunity to reach many more customers and their patients as an integrated part of Smith & Nephew’s extensive Sports Medicine portfolio.”

The deal is slated to close by the end of the year. While Smith & Nephew doesn’t expect it to make a dent in earnings next year, it expects it to be earnings accretive in 2019.

Activist Fund Encourages Smith & Nephew to Pare Down

Activist hedge fund, Elliott Management, has pushed for Smith & Nephew to shed certain parts of its business, in a move that could make the company a more attractive takeover target. The exact size of Elliott’s stake could not be determined, although it is said that Elliott has a position of more than 2%. At that level, it would rank as one of the company’s top seven largest shareholders.

Smith & Nephew is divided into three franchises — one which focuses on sports medicine, trauma and other surgical businesses, a second focused on reconstruction, and a third concentrated on advanced wound management. Geographically, Smith & Nephew’s strongest performance is in emerging markets, where underlying growth was 13%, compared with 2% in the U.S.

Smith & Nephew has been perennially viewed as a takeover target in recent years, as the medical devices industry has consolidated. The company’s share price has more than doubled over the past five years but it has also underperformed some of its peers, such as Stryker, its larger U.S.-based rival, which in 2014 disclosed that it had been working on a bid for Smith & Nephew. Besides Stryker, other leaders in the industry include Johnson & Johnson, which acquired orthopaedic device maker Synthes for $21.3 Billion in 2012, and Zimmer Biomet, which was formed by a $14 Billion takeover in 2014.

This month, Smith & Nephew said it had begun a search for a new chief executive after Olivier Bohuon, who joined the company in 2011 after stints at a number of pharmaceuticals groups including GlaxoSmithKline, announced he would retire by the end of next year.

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If you or a family member have suffered injury from an orthopedic medical device such as a hip, knee or shoulder implant, you and/or your family member may be entitled to money damages.

The Ahearne Law Firm, PLLC
Offices in Manhattan and Warwick, New York
Serving New York City, Orange County and the Hudson Valley
Mass tort lawsuits handled nationwide, including Stryker Rejuvenate / ABG II hip implants and LFIT V40 femoral head, DePuy Pinnacle and ASR hip implants, Smith & Nephew BHR hip implant, and ZimmerBiomet Durom Hip Cup and M2A Magnum hip implant
Personal Injury · Product Liability · Medical Malpractice  Commercial Litigation · Criminal Defense · Corporate Counsel Real Estate
For more information, please contact The Ahearne Law Firm, PLLC for an initial consultation and case evaluation. Call nationwide at (845) 986-2777.

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