This acquisition is expected to expand business opportunities for Bard surgical specialties in its Davol subsidiary. Davol makes soft tissue reconstruction technology, and its surgical specialties include hemostasis and wound management.
Medafor markets the Arista MPH hemostat, which is indicated as an adjunctive hemostatic agent to control bleeding when conventional means are ineffective or impractical. The Arista platform is a plant-based microporous polysaccharide hemospheres (controlled-porosity spherical particles manufactured from bio-inert plant polysaccharide) technology that has reportedly been shown to be safe, effective and easy to use in a variety of surgical procedures. Arista is a powder manufactured from potato starch and is broken down by the body within 48 hours. It was approved by the U.S. Food and Drug Administration in 2006 and has also been CE marked for sale in Europe.
Medafor also has what Bard officials believe to be a robust pipeline of potential future products expected to expand the use of this hemostat to control bleeding.
Because the function of hemostats is to control bleeding, they are used in a very wide variety of surgical procedures. These products can also improve visibility in the surgical site by controlling blood filling the space. The existing global market for surgical hemostats is more than $1.4 billion and this acquisition will provide Bard with a proprietary technology platform to expand its participation in this market.
“With the acquisition of Medafor, we continue to shift the mix of the portfolio to improve the organic growth profile of the business for the longer term,” said Timothy M. Ring, Bard’s chairman and CEO. “With its safety and ease of use profile, the Arista hemostat provides a great alternative to other commercially available hemostats while providing strong synergy with our Progel sealant technology and sales channel. This technology platform represents an important building block for our surgical specialty product offering and provides a global footprint for continued expansion.”
Bard expects this acquisition to add approximately 1 percent to revenue growth in 2014, and be a few cents dilutive to adjusted earnings per share in 2013 and neutral to 2014.
On Aug. 20, a jury awarded $2 million to a a patient who sued Bard over its vaginal mesh product Avaulta. There are still 8,000 similar cases regarding the mesh, which was made by Davol, to be heard. In the second quarter of fiscal year 2013, Bard's sales reached $498 million, 2 percent more than in the same period in 2012. However, legal costs, including penalties from Avaulta lawsuits, wiped the company's profits out entirely and left it with a $162 million net loss.
Partly as a consequence of its legal worries, Bard has embarked on a program of strategic change intended to allow it to focus on high-growth areas. It sold its electrophysiology business, which made $111 million in 2012, to Boston Scientific last month. Medafor's technology is much closer to the areas in which Bard is already well known.
C.R. Bard is based in Murray Hill, N.J.; its Davol subsidiary is located in Warwick, R.I.