Amedica Corporation (NASDAQ: AMDA) is having a great day in the market today, and for good reason. The comapny announced that a key asset sale has closed, bringing important funds through the door. Of course, the news excited investors who are pushing the stock on a run for the top. Today, we’ll talk about:
- The transaction;
- what we’re seeing from AMDA as a result; and
- what we’ll be watching for ahead.
AMDA Rockets On Closing Of Asset Sale
As mentioned above, Amedica is having a great day in the market today after announcing the closing of an asset sale. In a press release issued this morning, the company announced that it has completed the previously announced sale of its spine business and related assets. The buyer of the business was CTL Medical, a Dallas-based privately held medical device manufacturer. The transaction closed on October 1, 2018.
The original asset purchase agreement was announced by AMDA on September 5. Under the terms of the agreement, CTL Medical has acquired all of the company’s commercial spine business for a total price of up to $10 million. Also as part of the agremeement, AMDA will be the exclusive provider of silicon nitride products to CTL.
In a statement, Dr. Sonny Bal, Chairman of the Board at AMDA, had the following to offer:
We are pleased to have closed this transaction so quickly after the September announcement. Amedica is now free of the considerable costs and complexity attendant to retail spine sales, allowing the company to focus on the core biomaterials and OEM business instead. We will fully support CTL spine sales in terms of clinical and basic science, surgeon education, and any other necessary sales support. Most importantly, as a debt-free company, Amedica can now focus on revenue opportunities outside of spine where our R&D program is particularly strong, such as in the dental and arthroplasty markets… In our opinion, this is the leanest, most efficient, and overall best position that Amedica has ever been in as a company, from a cash position or otherwise, with multiple strategic options going forward.
The above statement was followed up by Daniel Chon, President and CEO at CTL Medical. Here’s what he had to say:
The depth of science behind silicon nitride research continues to impress us. We, at CTL Medical, the only company to possess such highly differentiated biomaterial in spine, are extremely bullish on the outlook and opportunities in our industry. The closing of the acquisition now gives us the green light to unleash the talents of our engineers to drive innovation by applying the attributes of silicon nitride across our entire product portfolio. The sheer amount of energy, interest, and excitement that this acquisition has created is already noticed worldwide and was clearly visible during the North American Spine Society (NASS), hosted in Los Angeles last week. The responses from our global partners, surgeons and distributors were extremely positive and equally encouraging. We believe that as our two organizations come together, each with distinct strengths, as one pulls from the front and the other pushes from the back, a new era, movement, and momentum in our industry will be seen and felt.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to invest is that the news moves the market. In the case of Amedica, the news proved to be overwhelmingly positive. After all, the closing of this transaction will bring $10 million in funding through the door that will be used to focus on the company’s core assets. So, it comes as no surprise that excited investors are sending the stock on a run for the top. As is almost always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:55), AMDA is trading at $0.35 per share after a gain of $0.11 per share or 43.55% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AMDA. In particular, we’re interested in following the story surrounding the company’s work to expand its silicon nitride business. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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