Amedica Corporation (NASDAQ: AMDA) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced that it has entered into an agreement to sell an asset. As you could imagine, the news excited investors, sending the stock screaming for the top. Today, we’ll talk about:
- The asset sale;
- what we’re seeing from AMDA; and
- what we’ll be watching for ahead.
AMDA Announces Asset Sale
As mentioned above, Amedica Corporation is having an incredibly strong start to the trading session this morning aftre the company announced that it has entered into an agreement to sell an asset. In a press release issued early this morning, the company said that it has executed an asset purchase agreement with CTL Medical. Under the terms of the agreement, CTL Medical will acquire all of the company’s commercial spine business. AMDA said that the sale will come with a price of $10 million and that the transaction is expected to close in the third quarter.
Of course, it’s important to remember that the agreement is still subject to customary closing conditions. Nonetheless, it looks like this one will go through.
In a statement, Dr. Sonny Bal, Chairman of the Board of Directors for AMDA, had the following to offer:
The transaction makes strategic sense, by monetizing our commercial spine sales organization and allowing Amedica to focus on its core biomaterials and OEM business… Combining the mutually complementary products, customers, and sales regions of the two companies will offer significant accretive value to our shareholders. The addition of a highly-differentiated silicon nitride and metal product line to CTL Medical’s complete offering of spine surgery implants and instruments will benefit both companies, as well as our surgeon customers. Amedica’s products and scientific data have established that silicon nitride resists bacteria, promotes bone healing, and has superior clinical outcomes. CTL Medical is best positioned to profitably leverage these advantages in the retail spine market.
Going forward, Amedica will actively support spine sales by CTL Medical, specifically through surgeon education, peer-forums, publications, and research related to silicon nitride. Divesting the sales organization will drive down costs, while allowing Amedica to focus on additional OEM revenue opportunities outside of spine, such as in the dental and arthroplasty markets. As additional downstream opportunities with CTL Medical become apparent in the future, they will be explored as well.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that it’s important to keep an eye on the news. After all, the news moves the market. In the case of Amedica, the news that was released this morning was overwhelmingly positive. After all, the sale of the asset means that the company will bring in much needed funding. So, it comes as no surprise to see that excited investors are sending the stock on a run for the top in the market this morning. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (10:42), AMDA is trading at $0.49 per share after a gain of $0.025 per share or 5.21% thus far today.
Stop wasting your time! Start fidning winning trades in minutes with Trade Ideas!
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 sale of its spine injury business and the use of the funds the sale generates. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!