Synthes Sells Subsidiary to Settle Plea Bargain West Chester, Pa.-based Synthes Inc. sold assets

Synthes Sells Subsidiary to Settle Plea Bargain

West Chester, Pa.-based Synthes Inc. sold assets of its Norian subsidiary to Exton, Pa.-based Kensey Nash Corporation for $22 million to satisfy terms of a plea bargain agreement with the federal government.

Last year, Synthes was charged with running an illegal test market for a Norian bone cement which resulted in three patients’ deaths. The company pleaded guilty to unauthorized testing, paid $23 million in fines for failing to report the incident to the U.S. Food and Drug Administration, and agreed to divest its Norian assets.

Synthes faced a divesture deadline of May 24. Missing the deadline would have subjected the company to fines and possible exclusion from Medicare and Medicaid. It is expected that Synthes will dissolve Norian as a stand-alone company due to exclusion.

“As part of a long-term supply agreement, Kensey Nash will manufacture Norian products, and Synthes will exclusively distribute the products worldwide,” said a statement from Kensey Nash. The company paid Synthes $11 million upfront and will pay another $11 million when manufacturing is transferred from Norian’s facility to Kensey’s.