SANTA BARBARA, California -- Sientra, Inc. (NASDAQ: SIEN), a medical aesthetics company (“Sientra” or the “Company”), announced today the acquisition of the dedicated FDA-approved silicone breast implant manufacturing operation in Franklin, Wisconsin, from Lubrizol Life Science.
Lubrizol Life Science will turn over to Sientra a turnkey, fully operational Class 3 breast implant manufacturing operation that is now 19 months into commercial scale-up with established capacity that continues a steady ramp to position the Company to meet its near-term and long-term commercial objectives. Importantly, this transaction culminates a win-win commercial relationship between Sientra and Lubrizol Life Science that began in 2016 with co-development to achieve the validated manufacturing processes and specifications necessary to gain FDA PMA supplement approval in April 2018.
Jeff Nugent, Chairman and Chief Executive Officer of Sientra, said, “This acquisition advances our strategic goal of becoming the leading provider of breast products in the worldwide breast augmentation and reconstruction market. Over the years we have considered several options to achieve vertical integration for our breast implants and we believe that acquiring this already established operation in a turnkey transaction is the most intelligent way to achieve this goal with the best mix of risk, reward, investment and speed.”
Mr. Nugent continued, “We want to thank Lubrizol Life Science for their strong relationship these past four years and for their steady efforts in building a world-class breast implant operation that could be transferred over to us so seamlessly. We are confident in the significant manufacturing expertise within the Sientra organization and our ability to successfully integrate the breast implant operation.”
“Lubrizol Life Science and Sientra have had a long-standing relationship in design, development and scale-up of several cosmetic implant products,” said Uwe Winzen, General Manager of Lubrizol Life Science. “Sientra’s acquisition of this product line helps it achieve its long-term strategic goal and allows the Health business of Lubrizol Life Science to focus our efforts on becoming the preferred design, development and manufacturing partner for the medical device industry. I would like to thank the entire Lubrizol team in Franklin, whose hard work and dedication has made this co-development successful. Given Sientra’s team, I am confident that the employees who transition to Sientra will be excited to be part of its next stages of growth. We look forward to working with Sientra to ensure a smooth and successful transition for everyone involved, as well as our continued relationship in this space. Lubrizol Life Science will continue to manufacture Sientra’s tissue expanders in Victor, Montana and both companies will continue to collaborate on bringing innovative new products to the aesthetic market."
Mr. Nugent concluded, “With this acquisition, Sientra is now positioned to pursue the attractive breast implant market opportunity with direct control of its destiny, leveraging our unique brand, safety advantages, physician relationships, and strong product portfolio. We expect our newly acquired manufacturing capability in Franklin to be a platform for product supply as well as a valuable extension to our ongoing product development and innovation initiatives at our R&D center of excellence in Carpinteria. In sum, this important strategic transaction furthers our ability to continue to achieve our market share growth objectives while delivering significant value to plastic surgeons, patients, and shareholders.”
The parties have agreed to total transaction consideration of $20 million in cash and up to 607,442 shares of Sientra stock for assets comprised of dedicated manufacturing equipment, building improvements, in-process inventory, raw materials and supplies and the transfer of the intellectual property rights, processes and know-how necessary for Sientra to manufacture its breast implants.
Sientra will employ the majority of Lubrizol Life Science’s employees that are currently dedicated to the Sientra implant manufacturing operation in Franklin. The parties have also agreed to a transition services agreement and a long-term lease agreement of existing and expansion space in Lubrizol’s Franklin facility. Sientra’s tissue expanders will continue to be manufactured by Lubrizol Life Science in Victor, Montana and both companies will continue to collaborate on bringing innovative new products to the aesthetic market.
Sientra will hold a conference call today, November 7, 2019 at 5:00 p.m. ET to discuss third quarter 2019 financial results and the acquisition. The dial-in numbers are 844-464-3933 for domestic callers and 765-507-2612 for international callers. The conference ID is 9194103. A live webcast of the conference call will be available on the Investor Relations section of the Company's website at www.sientra.com. The webcast will be archived on the website following the completion of the call.
The Lubrizol Corporation, a Berkshire Hathaway Company, leverages its unmatched science to unlock immense possibilities at the molecular level, driving sustainable and measurable results to help the world Move Cleaner, Create Smarter and Live Better. Founded in 1928, Lubrizol owns and operates more than 100 manufacturing facilities, sales and technical offices around the world and has approximately 8,800 employees. For more information, visit www.Lubrizol.com.
Headquartered in Santa Barbara, California, Sientra is a diversified global medical aesthetics company and a leading partner to aesthetic physicians. The Company offers a suite of products designed to make a difference in patients' lives by enhancing their body image, growing their self-esteem, and restoring their confidence. Sientra has developed a broad portfolio of products with technologically differentiated characteristics, supported by independent laboratory testing and strong clinical trial outcomes. The Company’s Breast Products Segment includes its OPUS® breast implants, the first fifth generation breast implants approved by the FDA for sale in the United States, its ground-breaking Allox2® breast tissue expander with patented dual-port and integral drain technology, and BIOCORNEUM® the #1 performing, preferred and recommended scar gel of plastic surgeons(*). The Company’s miraDry Segment, comprises its miraDry® system, which is approved for sale in over 40 international markets, and is the only non-surgical FDA-cleared device for the permanent reduction of underarm sweat, odor and hair of all colors.
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