A new $200-million-plus company spun off from medical technology giant Smith & Nephew and headquartered in Durham is up and running – and hiring.
Bioventus, which debuted Monday, has nearly 500 U.S. employees and intends to soon begin the process of adding about 50 additional employees, including about 20 at its headquarters off of Emperor Boulevard, said spokesman Mike Truell. Bioventus currently has 60 workers in Durham, including a management team led by CEO Mark Augusti, who previously headed the biologics and clinical therapies division at Smith & Nephew, which also was based in Durham.
Augusti said that being reborn as a privately held, more focused business will enable it to accelerate its organic growth. In addition, it will be able to tap its new majority owner – Essex Woodlands, a health care investment firm with $2.5 billion under management – for funds to further expand through acquisitions.
What is now Bioventus reaped about $240 million in revenue in 2011, up from $223 million in 2010. The company’s top seller is Exogen, an ultrasound system that accelerates the healing of fractured bones. It also sells two injectable medicines for osteoarthritis, or degenerative joint disease: Supartz, for knee pain, and Durolane, for pain in a variety of joints. Durolane is not available in the U.S., and Bioventus expects to take over the marketing of it overseas from Smith & Nephew on June 1.
United Kingdom-based Smith & Nephews, which last year generated nearly $4.3 billion in revenue, announced in January that it was spinning off its biologics and clinical therapies division into a joint venture 51 percent owned by Essex Woodlands. Smith & Nephew retains a 49 percent ownership stake and also received $98 million in cash and a $160 million five-year note.
‘More nimble, more innovative’
“It’s not Smith & Nephews spinning something off and walking away from it,” said Marty Sutter, managing director and co-funder of Essex Woodlands. “This is a wonderful opportunity where a larger company recognizes that, sometimes, a smaller company will be more nimble, more innovative.”
Bioventus will be investing more money in research and development, Sutter said. But over the next five years he expects the majority of innovation to come from acquiring technology or acquiring companies.
More than 50 Smith & Nephew employees overseas who work for the biologics and clinical therapy divisions are expected to shift to Bioventus after the necessary approvals are obtained. In the meantime, they are working on distribution of Bioventus products outside the U.S.
Smith & Nephew retains a small contingent of about 10 employees in Durham, Truell said. Smith & Nephew executives couldn’t be reached for comment.
Augusti participated in the decision to locate the biologics and clinical therapies division in Durham in 2008, a decision he said was influenced by the talented local workforce and the favorable business environment.
“I can tell you that it was not solely because I’m a Duke graduate,” he joked. Augusti, 46, majored in computer science and economics at Duke and also received an MBA from UCLA.