(ARTC) NeuroTherm Buys ArthroCare Devices

Surgical products maker ArthroCare Corp (ARTC) has reportedly divested its Parallax and Contour product lines used in interventional spine surgeries to leading pain management products maker NeuroTherm, Inc. The Parallax products are used in a number of orthopedic procedures, including treatments for vertebral compression fractures (“VCF”), while Contour has been designed for vertebral body void (or space) creation.

VCF is a condition characterized by the collapse of the vertebral bone. It may occur due to trauma or a weakened vertebra in patients with osteoporosis or metastatic cancer.

Massachusetts-based NeuroTherm is a leading provider of radio frequency generators and related disposables used in chronic pain management. The company markets its products to interventional pain, interventional radiology, orthopedic and foot and ankle specialists globally.

The acquisition of the Parallax and Contour products fits well with NeuroTherm’s expertise in interventional pain management and is highly complementary to its existing product range. It enables the company to expand its customer base into the fast-growing and lucrative VCF treatment market. The acquisition broadens NeuroTherm’s foothold in the $5 billion worldwide interventional pain medicine market.

Austin, TX-based ArthroCare develops and markets minimally-invasive, state-of-the-art surgical products, addressing a multi-billion dollar market opportunity across several medical specialties.

Many of the company’s products leverage its proprietary Coblation technology, which uses low-temperature radiofrequency energy to dissolve soft tissue (instead of burning it), thereby minimizing damage to healthy tissues. ArthroCare competes with Stryker Corp. (SYK), Smith & Nephew plc (SNN) and Johnson & Johnson (JNJ), among others.

ArthroCare obtained the Parallax product line following its acquisition of Parallax Medical, a leading provider of VCF treatments, in 2004 for $28 million. The company expanded the Parallax product range in mid-2008 with the launch of the Parallax Contour device, which is used to mechanically displace soft bone in fractured vertebrae.

Moreover, ArthroCare secured the FDA approval, in February 2011, for its Parallax Contour enhanced vertebral augmentation device, designed for vertebral body void creation followed by injection of bone cement.

ArthroCare is expected to complete the consolidation of the operations in its Sunnyvale, California facility with those in its headquarters in Austin, Texas, before end-2011. The move is expected to cost the company between $10 million and $10.5 million.

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