The Korthoff Years
Under Korthoff, Wright Medical began a major product line and international distribution expansion.
Korthoff signed deals in Japan, bought Orthotechnique in Paris and reached an agreement with BioMed to get distribution rights for an MIS [minimally invasive surgery] spine discectomy system. Korthoff led Wright into trauma products, spinal fixation devices and arthroscopic imaging products.
One of the most durable and, in retrospect, best licensing agreements Wright negotiated during this period was with U.S. Gypsum for a moldable bone void filler and drug delivery system called calcium sulfate hemihydrated.
That agreement laid the foundation for Wright’s growing orthobiologics product line.
In 1994, Korthoff merged Wright with Orthomet, Inc., a designer, manufacturer, and marketer of orthopedic products and reconstructive implants. One year later Wright posted up a net loss of $49.3 million, due to write-offs related to acquisitions.
In 1995, Richard D. Nikolaev, formerly president of Orthomet, became CEO. In 1996 the FDA cleared for sale Wright’s OsteoSet Bone Graft Substitute for use in bone voids and gaps in the extremities. The resorbable calcium sulfate product proved to be popular with surgeons and the company continued to build on that success with subsequent variations of the OsteoSet theme.
By 1997, it was clear that Korthoff’s broad-based strategy of product development was not working. Wright Medical reported $122 million in sales that year and more losses. The company was again, teetering on the edge of bankruptcy.
Tom Patton Cleans House
The board of directors asked Thomas Patton, a member of Wright’s board and an attorney, to take over as CEO. He restructured the company, eliminating some executive positions and cutting 150 jobs as the company sold the spinal and trauma product businesses. Under his leadership, the company stabilized and kept its focus on small joints and its successful bio-orthopedics products OsteoSet and OsteoSet-T.
Patton’s success in settling Wright down and regaining a focus on its core strengths attracted, in September 1999, two of the leading healthcare private equity firms in the country, Warburg Pincus Equity Partners L.P. and the Vertical Group, Inc. They liked what they saw and bought a majority interest in Wright Medical Technology. Coincident with the investment, Warburg and Vertical merged Wright with Cremascoli Ortho Group, of Toulon, France.
Combined, these two companies brought to market not only a wide range of reconstructive joint devices, including Cremascoli’s important products in hip reconstruction but proven distribution on both sides of the Atlantic. Now Wright had effective distribution in Europe for its extremity products and Cremascoli had distribution in the United States and Japan.
