restor3d, renowned for enhancing patient-specific surgical measures with 3D printing, and ConforMIS (Nasdaq: CFMS) are joining forces to lead the way in personalized 3D printed orthopedic devices. Known for its focus on orthopedic and spine surgeries, restor3d aims to improve both patient outcomes and surgical efficiency through anatomically accurate, patient-specific implants and surgical tools. According to the deal, restor3d is set to buy all of ConforMIS’ shares for $2.27 each – that’s about 96% more than the share price on June 22, 2023 ($1.16). With 7.5 million outstanding shares, restor3d’s buyout could potentially hover around $17 million, although the exact figure has not been officially confirmed.
Founded in 2004 by Dr. Philipp Lang, ConforMIS aimed to revolutionize personalized joint implants, focusing on creating products tailored to the individual patient rather than requiring the patient to adapt to an “off-the-shelf” implant. 3D printing has been a key part of its manufacturing process to create customized joint replacement implants. This use of 3D printing has been central to ConforMIS’ mission of providing patient-specific implant solutions. This commitment to bespoke care was evident even during ConforMIS’ most challenging times, such as Lang’s departure as CEO in 2016, which led to a steep 46% drop in its share price.
Despite the hurdles, ConforMIS inked a deal in 2019 with medical tech titan Stryker. This agreement, worth up to $30 million, focused on ConforMIS’ bespoke instrumentation technology, which utilizes CT scans to develop custom, single-use instrumentation for knee replacement surgeries. At the time, Stryker committed to a $14 million upfront payment, with an additional $16 million tied to future sales, licensing, and developmental milestones.
However, it appears that ConforMIS had both a deal and a legal battle with Stryker. Conformis also filed a lawsuit against Wright Medical, which is now part of Stryker, alleging patent infringement on certain patents. This led to a settlement where Stryker agreed to pay ConforMIS $15 million to settle the patent litigation involving patient-specific shoulder instruments. Despite this legal battle, the deal with Stryker for the PSI technology and exclusive distribution rights for five years still went through.
Financially, ConforMIS’ journey has been much like a rollercoaster ride. It went public in July 2015 with an opening share price of $15, raising approximately $135 million. However, turbulence followed Lang’s exit, with shares plunging to $5.47. Fast forward to 2023, and ConforMIS found itself struggling with a first-quarter revenue of $12.8 million, an 18% year-on-year decrease. Despite these challenges, the company surpassed analyst expectations for earnings per share (EPS) and revenue by 5% and 2.1%, respectively.
In early June 2023, ConforMIS’ shares hit an all-time low at $1.09. However, change is in the air with the announcement of the acquisition. The share price has nearly doubled, demonstrating the market is confident with this promising alliance with restor3d.
“This combination will create a leading personalized 3D-printed medical device company,” stated Kurt Jacobus, restor3d CEO. By merging their strengths in artificial intelligence-driven implant design, digital automation, and 3D printed osseointegrative biomaterials, both companies expect to offer clinically differentiated and cost-effective solutions across the orthopedic landscape.
Mark Augusti, CEO at ConforMIS, echoed this sentiment. He expressed his excitement over this new chapter for ConforMIS with restor3d, praising the value of their portfolio, core technology, and intellectual property. Augusti believes the transaction will benefit all stakeholders positively and allow ConforMIS to continue its mission to help patients live productive lives after knee or hip surgery.
ConforMIS’ Board of Directors has unanimously approved the transaction, which is expected to close by the end of the third quarter of this year. However, with restor3d’s definitive merger agreement to acquire ConforMIS, a range of outcomes could be possible. ConforMIS’ current trading on the Nasdaq could either cease, transition to restor3d or continue under new terms. Ultimately, the exact path forward will depend on the specific terms outlined in the merger agreement and the strategic direction chosen by the new entity.