Healthcare Industry News: ZEAL
News Release - May 18, 2007
Portland Orthopaedics resumes control of US hip distribution
Portland to take direct control of distribution in the USA after ownership change at Plus Orthopedics IncSydney, Australia, May 18 (HSMN NewsFeed): After a new agreement with US distributor Plus Orthopedics Inc., Portland Orthopaedics Limited (ASX:PLD) has secured direct control of existing US distribution of Portland’s orthopaedic joint products.
Portland Orthopaedics signed its first agreement with Plus Orthopedics Inc. (Plus Inc) in March 2006 for Plus Inc to exclusively distribute Portland’s products in the US. This second agreement is after the March 2007 news that UK-based orthopaedics company Smith & Nephew was acquiring Swiss-based Plus Orthopedics. Plus Inc is a fully owned subsidiary of Plus Orthopedics. A consequence of the acquisition is that Plus will cease to be a distribution channel for Portland.
Under the new agreement between the parties executed today, Portland has secured the right to distribute directly to the 13 existing independent US distributors of Portland’s orthopaedic joint products. Portland will employ additional sales staff in the US and expects to benefit from significantly higher profit margins on its rising sales. Portland has taken the initiative to secure a new agreement and to override uncertainty associated with the acquisition of Plus. Plus and Portland Orthopaedics have now agreed to terminate the existing distribution agreement on 17 July 2007 on terms that Portland regards as favourable.
Products offered for sale in the US by Plus have always been packaged and branded as Portland products and the interface between regional distributors and orthopaedic surgeons in the US will not change. Having consistent Portland brand and packaging in all sales to date in the US, and using the same regional suppliers, should enable a seamless change of distributors. Orthopaedic surgeons in the US using Portland’s products will have reliability of supply and service maintained. Portland will repurchase a small part of the inventory sold previously to Plus and play the same role as Plus in relationships with it’s own independent distributors.
In other territories such as China and the UK, Portland’s management is progressing product registration with distribution partners.
“The board sees this as a positive move for Portland as Plus has very effectively launched Portland’s new products in the US,” said David Sekel, managing director of Portland Orthopaedics. “Clinical results have been outstanding and we have seen 100 percent retention of surgeons once they have adopted Portland’s products. This is an indication of strong support.”
“Our strategy is based on having spent several years distributing products ourselves, excellent contacts brought in by Plus Inc and products that are enjoying substantial acceptance by surgeons.”
Enquiries:
David Sekel
Managing Director
Portland Orthopaedics
0411 120 744
John Lee
Chairman
Portland Orthopaedics
0419 407 191
About Portland Orthopaedics: Listed on the ASX in December 2005, Portland (ASX:PLD) is a developer and manufacturer of specialist hip replacements. Portland’s first product, the DTC Hip, was conceived in 1991 as standard hip implants proved inadequate in cases with substantial bone loss especially where a hip implant had already been inserted. Portland’s first hip implant was trialled in 1997 and so far more than 2,000 implants have been sold, the majority in the US and Australia.
Portland has regulatory approval to sell a range of primary, revision and tumour hip replacement products in the US, Europe, Australia, New ZEALand and Israel. The core technologies are all patented and future applications include shoulders, ankles and other joints.
Source: Portland Orthopaedics
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