Stryker Q2 2011

In addition, the company's biosurgery business manufactures hemostasis product such as the Vitagel, which are designed to control interoperative and postoperative bleeding. We believe the collective talent of our sizable sales forces across multiple franchises positions us to build on Orthovita's success and accelerate sales growth....Matthew O'Brien - William Blair & Company L.L.C.

Okay. And then the second question on the biologic side with the Orthovita acquisition. Can you just talk a little bit about where your utilization was with your biologic portfolio before the Orthovita deal in terms of all the spine cases, spinal fusion cases you were involved with? And then where you think that may go over the next 6 months or a couple of years even with that broad portfolio available to you now?

Katherine Owen

I would view that the acquisition is very similar in that if we're going to leverage the product offering that we got with the Orthovita deal through our much broader distribution channels in both inpatient and outpatient and across multiple divisions, Instruments, Spine, as was mentioned earlier. I wouldn't view this as leveraging the revenue that we were generating within our biotech specifically. This is where we're rounding out our product portfolio where there was a gap and, again, focusing on our core and leveraging the distribution capability that we have.

Stryker Announces Definitive Agreement to Acquire Orthovita, Inc. for $3.85 Per Share in Cash

Kalamazoo, Michigan - May 16, 2011- Stryker Corporation (NYSE:SYK) announced today a definitive agreement to acquire Orthovita, Inc. (Nasdaq:VITA), a global developer and manufacturer of orthobiologic and biosurgery products through an all cash tender offer. Orthovita competes in the $5 billion orthobiologics market and is a global leader in synthetic bone grafts with its Vitoss(TM) product offering, and also competes in vertebral augmentation with its Cortoss(TM) product offering. In addition, the company's Biosurgery business manufactures hemostasis products such as Vitagel(TM) which are designed to control intra-operative and post-operative bleeding. Combined, Orthovita's product portfolio achieved sales of $95 million in 2010. The acquisition of Orthovita is highly complementary to Stryker's existing orthobiologics offering, which is currently sold through multiple Stryker divisions.
Under the terms of the agreement, Orthovita shareholders will receive $3.85 for each outstanding Orthovita share of common stock. The value of the transaction is estimated at $316 million, based upon Orthovita's 79 million fully diluted shares outstanding as well as net debt of $12 million.  
"With this acquisition we are meaningfully expanding our orthobiologics product portfolio and strengthening our competitive position in key segments of the Spine, Orthopaedics and Biosurgery markets," said Stephen P. MacMillan, Chairman, President and Chief Executive Officer of Stryker. "We believe the collective talent of our sizable sales forces across multiple franchises positions us to build on Orthovita's success and accelerate sales growth."  
The boards of directors at Stryker and Orthovita have approved the transaction, and the board of directors of Orthovita resolved to recommend that Orthovita shareholders tender their shares to Stryker in the tender offer.  In addition, shareholders holding approximately 14.5% of the outstanding shares of Orthovita common stock have entered into agreements with Stryker to support the transaction and to tender their shares in the offer.
The tender offer is scheduled to commence within 10 business days and is expected to close in the second quarter of 2011.  The tender offer is subject to customary closing conditions, including the tender of a majority of the outstanding shares of Orthovita common stock on a fully diluted basis and the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period. Following the tender offer, Stryker will acquire the remaining outstanding shares of Orthovita common stock through a second step merger.  Upon closing, the transaction is expected to be neutral to Stryker's 2011 earnings per share excluding acquisition and integration-related charges.
Citi served as Stryker's exclusive financial advisor in connection with this transaction.
Stryker is one of the world's leading medical technology companies and is dedicated to helping healthcare professionals perform their jobs more efficiently while enhancing patient care. The Company offers a diverse array of innovative medical technologies, including reconstructive, medical and surgical, and neurotechnology and spine products to help people lead more active and more satisfying lives. For more information about Stryker, please visit www.stryker.com.

FDA Approves Orthovita's New Collagen Facility

Orthovita, Inc. (NASDAQ: VITA | PowerRating), an orthobiologics and biosurgery company, reported today that the U.S. Food and Drug Administration (FDA) approved Orthovita's PMA supplement for a new collagen processing facility in Malvern, Pennsylvania. Orthovita will use the new facility to process the highly purified form of collagen used in its VITAGEL(TM) Surgical Hemostat product. VITAGEL is a composite liquid hemostat used in surgical procedures as an adjunct to hemostasis when control of bleeding by ligature or conventional procedures is ineffective or impractical. VITAGEL is combined with the patient's own plasma immediately prior to application to a bleeding site. A fibrin/collagen clot forms quickly to control bleeding and provide a three-dimensional matrix to facilitate healing.

The approval of the new facility not only gives Orthovita enhanced control over the supply and quality of a key raw material for its VITAGEL product, but also provides the Company with an opportunity to develop, manufacture and market additional collagen-based products. This technology processes collagen to retain crucial aspects of its natural molecular structure and the potent biological characteristics found in the collagen of living tissues. As a result, the collagen processed at the facility will be among the purest available on the market.

Orthovita's President and Chief Executive Officer Antony Koblish stated, "We are very pleased to have further solidified our supply control over our VITAGEL product. The regulatory approval of our collagen facility also gives us another resource for executing on our goal to broaden our product offerings and increase sales force leverage. We are actively engaged in research and development work for products based on the versatile properties of the ultra pure collagen that can be made at our FDA-approved facility. We are also pursuing outside partnering and co-development arrangements to utilize our collagen facility and technical know-how."

Orthovita Q1 2010 - Edited

Our biosurgery sales increased 12% during the first quarter of 2010, compared to the first quarter of 2009. Biosurgery offers an important strategic entry to hospitals where our Hemostats product have many application and new sales representatives benefit particularly from this product line as they seek to gain access to new accounts......

Graham Tenneco

What is the direction or do you think drift going to be or trends based on the Obama's healthcare plan and what might meaningful procedures and where an ASP basically?

Tony Koblish

We can't know all of that what's going to happen. However, I think the concept of evidence-based medicine and clinical data and clinical value proposition to the patients; I believe is going to be more and more important as we go forward. I think that we are exceptionally well positioned across all of our product platforms for that day, not just with Cortoss, which happens to have superb therapeutic benefit, value proposition to the patient, subsequent fracture benefit to the patient also reduced healthcare expenditure and re-hospitalization as shown in our clinical data, but we have an excellent proposition around the Vitoss business relative to more expensive therapies in bone grafting and our Vitagel business is also plays to demonstrate some effected clinical data around knee replacements etcetera. So, I think we are very well positioned in terms of comparative effectiveness, clinical data value proposition that one trend that’s not going to go away and I think that’s going to just be the price to play going forward. We are not going to get there all at once, but it’s going to happen and so I think cost effective, clinical value proposition we are very well situated for that eventuality, which is I think going to be the major fallout long-term.

Source: Seekingalpha

Orthovita - UBS Global Life Sciences Conference