FDA approves Wright bone graft

Long-sought government approval of a bone-graft product on Tuesday achieved a key part of Wright Medical Group Inc.’s blueprint for fast growth as a Memphis medical device maker.

The company announced that the U.S. Food and Drug Administration approved Augment Bone Graft, a biologic product the firm bet on with a $190 million purchase in 2013 of Franklin, Tennesseebased BioMimetic Therapeutics Inc.

Setbacks, most recently government inspections of a manufacturing vendor in California, have delayed FDA approval. But with the path to market open now, Wright sees a potential $300 million in sales for the product, including revenue of $10 million to $12 million as it ramps up sales in the first several months.

“The FDA approval of Augment marks a capstone achievement that demonstrates the strength of our science and provides a breakthrough therapeutic option as an alternative to autograft in ankle and hindfoot procedures,” Robert Palmisano, Wright Medical chief executive officer, said in a statement.

Augment stimulates bone formation and growth as an alternative to using a patient’s tissue harvested from another site, such as a hip, for ankle and hindfoot fusion surgeries. The same technology, the company reports, may lead to market opportunities in tennis elbow and rotator cuff repair.

Augment won approval from Canadian regulators in 2009 and in Australia and New Zealand in 2011.

The company reported that international sales grew 4.7 percent, to $5.3 million after currency exchange rates were factored in, for its second quarter this year.

In addition to the initial price Wright Medical paid for BioMimetic, Wright agreed to pay additional cash payments of up to $6.50 per share once the FDA approved Augment, according to company filings. That payment was estimated to be about $100 million or more. BioMimetic was backed by MB Venture Partners of Memphis.

Wright is still seeking profitability, building a fast-growth extremities and biologic company after selling off its OrthoRecon knee and hip implant segment in 2014 to Shanghaibased MicroPort Scientific Corp. in a $209 million deal. MicroPort took over the hip and knee facilities in the Memphis suburb of Arlington.

Wright has about 1,200 employees worldwide, including about 500 between its Memphis headquarters and operations in Arlington.

Wright Medical is in the midst of steps to complete a merger with Netherlandsbased Tornier N.V., an agreement announced last October.