May 7, 2003
Acquisition to Expand Spine Product Portfolio
(RAYNHAM, Mass., May 6) -- DePuy AcroMed, Inc., a Johnson & Johnson
company, reported today that it has signed a definitive agreement to acquire
Link Spine Group Inc., a privately owned corporation located in Branford, CT.
The acquisition will provide DePuy AcroMed with exclusive worldwide rights to
the SB CHARITÉ™ Artificial Disc, the principal product of Link Spine Group.
Terms of the transaction include a $325 million upfront payment with further contingent payments due upon achievement of regulatory and other milestones. As a result of the acquisition, Johnson & Johnson is expected to incur an estimated one-time after-tax charge of approximately $175 million, or $.06 per share, upon closing, reflecting the write-off of in-process research & development costs. Earnings guidance (which excludes one-time charges) provided by Robert J. Darretta, Chief Financial Officer of Johnson & Johnson on April 15th during the Company's first quarter conference call, will not change as a result of this transaction. The transaction is expected to close in the second quarter, 2003 and is subject to customary closing conditions and regulatory approvals.
The SB CHARITÉ™ Artificial Disc, approved and marketed in more than 30
countries outside the United States, is currently designated by the U.S. Food
and Drug
Administration
(FDA) with an Investigational Device Exemption (IDE) in clinical studies. Two-year
patient follow-up will be completed in December 2003 and DePuy AcroMed anticipates
submitting a Pre-Market Approval (PMA) application to the FDA in 2004.
"The SB CHARITÉ® Artificial Disc represents an important advancement in the treatment of spinal disorders," said Nicholas Valeriani, Johnson & Johnson Company Group Chairman with worldwide management responsibility for the DePuy franchise. "For many patients, total disc arthroplasty should provide a significant medical benefit. This investment underscores DePuy's commitment to innovative technology and advancing the standard of care for patients around the world."
Brian Cameron, President of Link Spine Group, said, "The SB CHARITÉ® Artificial
Disc has more than 15 years of clinical experience in Europe. We are pleased
DePuy
AcroMed has recognized this advancement in the treatment of spinal disorders.
This is an exciting opportunity to become part of DePuy AcroMed to bring significant
technology to patients around the world."