Acquisition Adds Innovative and Minimally
Invasive Treatment For Nasal Airway Obstruction – Significantly
Expanding Office and Operating Room Based ENT Opportunities
Entellus Medical, Inc. (NASDAQ:ENTL), a medical technology company
focused on delivering minimally invasive ENT procedures, today
announced that it has entered into a definitive agreement to
acquire Spirox, Inc., a privately-held ENT medical technology
company that develops, manufactures and markets the LATERA™
Absorbable Nasal Implant, a minimally invasive option for ENTs and
facial plastic surgeons to treat nasal airway obstruction.
The company also announced preliminary second quarter
2017 revenue results and updated full year 2017 revenue guidance.
Under the terms of the agreement, Entellus has agreed to acquire
Spirox for $25 million in cash and 3.4 million shares of Entellus
common stock, plus additional contingent payments over four years
based on revenue growth.
"We are excited to announce this significant transaction.
We believe this combination will enhance the near and
long-term growth potential of our business and bolster our strategy
to deliver less invasive treatment options to ENTs while driving
procedure volumes to more cost efficient care settings,"
said Robert White, President and Chief Executive Officer
of Entellus. “Nasal airway obstruction impacts as many
as 20 million people in the US with nearly one million people
undergoing some type of surgical procedure each year. Of
surgically treated nasal obstruction patients, over 70% may benefit
from lateral wall interventions and can be effectively treated with
the LATERA implant.”
Mr. White continued, “We look forward to working with the entire
Spirox team to advance our technologies and the addition of both
Duke Rohlen, President and Chief Executive Officer of Spirox, and
Jim Momtazee, a current director of Spirox and Head of KKR’s Health
Care Industry Team - Americas, to Entellus’ board of
directors.”
"Entellus and Spirox are two entrepreneurial companies that
share a strong strategic focus on providing better experiences for
physicians and patients with innovative and less invasive
technologies in the ENT sector,” said Duke Rohlen, Chief Executive
Officer of Spirox. “We look forward to combining our complementary
expertise and capabilities for the benefit of our shared customers,
patients, employees and shareholders."
The transaction is subject to customary closing conditions,
including the approval of the transaction by Spirox’s
stockholders. The transaction is expected to close early in
the third quarter of 2017.
Following FDA clearance, LATERA was commercially introduced
mid-2016, and has generated over $6 million in cumulative
revenue. Entellus expects the LATERA product will continue to
grow at a compounded growth rate of over 40% through 2020.
Preliminary and Unaudited Second Quarter 2017 Revenue
& 2017 Financial OutlookPreliminary and unaudited
revenue for the second quarter of 2017 is expected to be $21.9
million to $22.1 million, reflecting growth of 17% to 18% over the
second quarter of 2016. The preliminary unaudited revenue results
included in this release are prior to the completion of review
procedures and are therefore subject to adjustment.
Based on this transaction and second quarter revenue
performance, Entellus is raising its full year 2017 revenue
expectations to be in the range of $91.5 million to $94.5
million, representing growth of approximately 22% to 26% over 2016
revenue. The updated guidance compares to the company’s previous
revenue expectation for 2017 of $86.0 million to $89.0 million and
previous growth expectations of 14% to 18%. The company plans
to provide second quarter 2017 financial results and issue third
quarter and full year 2017 guidance reflecting the acquisition of
Spirox in early August 2017.
Conference Call and Webcast TodayEntellus’
management team will host a conference call beginning today at
8:30am ET to discuss its agreement to acquire Spirox. Individuals
interested in listening to the conference call may do so by dialing
(877) 930-5751 for domestic callers or (253) 336-7277 for
international callers, using Conference ID: 51246356. To listen to
a live webcast or a replay, please visit the investor relations
section of the Entellus website at: www.entellusmedical.com.
About Entellus Medical, Inc. Entellus is a
medical technology company focused on delivering superior patient
and physician experiences through products designed for the
minimally invasive treatment of patients. Entellus products
are used for the treatment of adult and pediatric patients with
chronic and recurrent sinusitis, as well as adult patients with
persistent Eustachian tube dysfunction. The Entellus platform
of products provides effective and easy-to-use solutions intended
to help simplify everything from diagnosis and patient selection,
to complex case revisions and post-operative care. Entellus’ core
product lines, XprESS™ ENT Dilation System, MiniFESS™ Surgical
Instruments, XeroGel Nasal Dressing and FocESS™ Imaging &
Navigation, combine to enable ENT physicians to conveniently and
comfortably perform a broad range of procedures in the office and
simplify treatment based in the operating room. Entellus is
committed to broadening its product portfolio with high-quality and
purposeful innovations for the global ENT market.
About Spirox, Inc. Spirox is committed to
improving the quality of life for patients suffering from nasal
obstruction. The Redwood City, California based company’s first
product – the LATERA Absorbable Nasal Implant – is designed to
address one of the most common, yet underdiagnosed, causes of nasal
obstruction today, nasal valve collapse caused by weakened lateral
wall cartilage. For more information, please
visit www.spiroxmed.com.
Forward-Looking StatementsAll statements
contained in this press release that do not relate to matters of
historical fact should be considered forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements generally can be identified by
the use of words such as “expect,” “anticipate,” “plan,” “could,”
“may,” “intend,” “will,” “continue,” “future,” “outlook,” other
words of similar meaning and the use of future dates.
Forward-looking statements in this release include the anticipated
timing and completion of the acquisition; the effect of the
acquisition of Spirox on Entellus’s future revenues and other
operating results; market potential and acceptance of Spirox’s
LATERA product; and Entellus’s anticipated revenue for second
quarter and full year 2017. These forward-looking statements are
based on the current expectations of Entellus' management and
involve known and unknown risks and uncertainties that may cause
Entellus' actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such risks and uncertainties include, among others,
delays in completing the acquisition and the risk that the
acquisition may not be completed at all; the anticipated incurrence
of additional indebtedness by Entellus to pay the cash portion of
the merger consideration; the failure by Entellus to obtain the
necessary debt financing arrangements to fund the acquisition;
risks that Entellus’s business may suffer as a result of
uncertainty surrounding the acquisition; failure to achieve the
revenues, cost savings, earnings, growth prospects and any or other
synergies expected from the acquisition or delays in realization
thereof; delays and challenges in integrating Spirox’s business and
operations after the acquisition is completed; operating costs and
business disruption during the pendency of and following the
acquisition, including adverse effects on employee retention and on
business relationships with third parties, including physicians,
providers, distributors and vendors; Entellus’s future operating
results and financial performance; adequate levels of coverage or
reimbursement for procedures using the company’s products;
competition; ability to expand, manage and maintain its direct
sales organization and market and sell its products in the United
States and internationally; risks and uncertainties involved in its
international operations; the compliance of its products and
activities with the laws and regulations of the countries in which
they are marketed; failure or delay in obtaining FDA or other
regulatory approvals or the effect of FDA or other regulatory
actions; risk of product recalls, product liability claims and
litigation and inadequate insurance coverage relating thereto; and
intellectual property disputes. Other factors that could cause
actual results to differ materially from those contemplated in this
press release can be found under the caption “Risk Factors” in the
company's Securities and Exchange Commission (SEC) reports,
including its Annual Report on Form 10-K for the year ended
December 31, 2016, filed with the SEC and its Quarterly Report on
Form 10-Q for the quarter ended March 31, 2017, which the company
intends to file with the SEC. Entellus undertakes no obligation to
update or revise any forward-looking statements, even if subsequent
events cause its views to change.
Contact: Lynn Pieper Lewis
415-937-5402
ir@entellusmedical.com
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