Stryker to sell OP-1 product family to Olympus

Stryker Corporation announced in a press release that it has entered into a definitive agreement with Olympus Corporation for the sale of its OP-1 product family, which includes OP-1 Implant, OP-1 Putty, Opgenra and Osigraft, for use in orthopedic bone applications for $60 million.

The transaction also includes the sale of the manufacturing facility in Lebanon, NH. The planned sale is aligned with strategic objectives for both companies, the company noted. Stryker will redirect a portion of the related R&D spending to other internal projects which it believes offers the potential for greater shareholder returns including its clinical efforts already underway with BMP-7 for potential use in osteoarthritis and research into other nonorthopedic applications. Given the early stage of these clinical efforts and the expected scope of data to be required by FDA, commercialization of BMP-7 is not expected for at least 5 years.

The boards of directors of both companies have approved the transaction, according to the press release.

As a result of the announcement, Stryker reported that it will incur a one-time noncash charge of approximately $75 to $80 million (net of income tax benefit) in the fourth quarter to reflect the anticipated loss on the sale of the previously described assets, which will reduce diluted net earnings per share by approximately $0.19 to $0.20.

Excluding the impact of the expected fourth quarter 2010 one-time charge, there is no change to Stryker's guidance for adjusted diluted net earnings per share for 2010, which is expected to be in the range of $3.27 to $3.30, an increase of 11% to 12% over adjusted net earnings per share of $2.95 in 2009, the company stated.