Innovative Spinal Technologies’ Assets Sold
The story of ill-fated spinal implant startup Innovative Spinal Technologies of Mansfield, MA, appears to be drawing to a close. Integra Life Sciences Holdings (NASDAQ: IART) of Plainsboro, NJ, said today that its subsidiary Integra Spine has acquired “substantially all of the assets” of IST in a bankruptcy auction for $9.25 million in cash.
As Xconomy was the first to report, IST shut down in January after raising $75 million in venture backing to develop implants to stabilize the spines of patients with injuries or degenerative conditions. By then, the company had already laid off most of its 100 employees. The company sought a buyer but ultimately filed for Chapter 7 bankruptcy early this summer.
Integra, which makes products for neurosurgery, orthopedic surgery, and general surgery, said the acquisition included IST’s so-called Paramount system for performing lumbar fusion and delivering stabilizing hardware to the spine via small incisions. It also included “development assets” related to IST’s Axient product line, a kind of external spine designed to stabilize the backs of patients with spinal injuries or disease while still allowing some degree of motion. Integra also acquired IST’s patent portfolio, which includes more than 100 U.S. and foreign patents and patent applications.
Randy Theken, president of Integra Spine, said in a statement that the company was “excited to add a minimally invasive spinal implant system to our product portfolio…This acquisition gives us innovative products that can be available near term, as well as intellectual property that will support a pipeline of new products, particularly in the rapidly growing field of minimally invasive spine surgery.” The company said it expects to bring the Paramount system to market early next year.
Integra said the market for minimally invasive spinal fixation systems amounts to $678 million a year—a market that IST, a 2002 spinout of the Texas Back Institute, was unable to penetrate before running out of cash, for reasons we explored in a February profile. The acquisition does seem to guarantee, as IST CEO Scott Schorer predicted to Xconomy, that some of the company’s products will reach the market, but not without significant losses for the company’s backers, which included MPM Capital and Orbimed Advisors.