UPDATE: April 17, 2019: Smith & Nephew announced Wednesday it completed its acquisition of Leaf Healthcare, which joins its advanced wound management unit. The medtech has not shared financial terms of the deal.
Smith & Nephew Monday said it will acquire the maker of a mobile patient monitoring system aimed at preventing pressure ulcers or bedsores. The acquisition follows a two-year partnership between the medtech manufacturer and startup Leaf Healthcare, during which time Smith & Nephew was an investor and sole distributor of the technology.
Leaf's system uses a single-use, wearable sensor placed on a hospital patient's chest to wirelessly monitor position and activity, so providers can remotely track turn protocol compliance in individuals at risk for pressure injuries.
Executives said in a release that the technology is meant to bolster Smith & Nephew’s advanced wound management unit, which posted about $1.28 billion in 2018 revenue, the smallest of its major franchises. Financial terms were not disclosed. The deal to close in the second quarter of 2019.
The acquisition adds to a string of recent tuck-ins by Smith & Nephew, having completed its buyout of meniscus repair device-maker Ceterix Orthopaedics in January, and last month announced a $660 million acquisition of regenerative medicine company Orsiris Therapeutics as well as the purchase of German medtech Brainlab's orthopaedic joint reconstruction business. Earlier this year, the company was rumored to be discussing a $3 billion deal with spinal surgery device maker NuVasive, which Smith & Nephew has not confirmed.
The M&A pattern for Smith & Nephew aligns with comments from CEO Namal Nawana on a February earnings call indicating that the company wants to "continue to find similar acquisitions" to the Ceterix deal, hoping to make more deals "to get access to adjacent markets."
Pressure injury prevention, which Smith & Nephew and Leaf argue can decrease length of hospital stay and reduce overall treatment costs, is one such area for growth. Bedsores are injuries to skin and underlying tissue especially common in bony areas of the body, experienced most often by individuals who spend long periods in a bed or wheelchair, or whose medical condition otherwise decreases ability to change positions.
As many as 2.5 million Americans develop these injuries each year, according to the Agency for Healthcare Research and Quality. To minimize risk, the National Pressure Ulcer Advisory Panel's recommendations include patient repositioning and early mobilization so that patients avoid putting pressure on a single area of skin for too long.
When put through a randomized clinical trial at Stanford University in 2018, researchers found that high-risk patients being monitored with the Leaf technology showed a 43% better turning protocol compliance, and these patients were 73% less likely to develop a pressure injury.