ArthroCare
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| Company type | Public (1996–2014) |
|---|---|
| Industry | Medical devices |
| Founded | 1993 |
| Founders | Hira V. Thapliyal; Philip E. Eggers |
| Fate | Acquired by Smith & Nephew |
| Successor | Smith & Nephew |
ArthroCare Corporation was an American medical device company best known for developing and marketing radiofrequency-based Coblation systems used in soft-tissue surgery across sports medicine and otolaryngology.[1][2] The company was headquartered in Austin, Texas, and in May 2014 it was acquired by Smith & Nephew for approximately $1.5 billion enterprise value.[3][4]
Acquisition by Smith & Nephew
ArthroCare was founded in 1993 by engineers Hira V. Thapliyal and Philip E. Eggers and initially based in California, focusing on applying controlled radiofrequency energy to surgical tissue removal.[5] The company completed its initial public offering in February 1996, selling 2.2 million shares at $14 each on NASDAQ under the ticker ARTC.[6]
By the mid 2000s ArthroCare organized around three main business units - Sports Medicine, Spine, and ENT - marketing disposable devices built on its patented Coblation platform.[7]
In July 2008 the company announced it would restate prior financial statements for 2006-2007 and Q1 2008 related to revenue recognition on distributor sales; shares fell sharply on the news.[8][9] The company completed its restatement with its 2008 Form 10-K filing in November 2009.[10]
On 3 February 2014 Smith & Nephew agreed to acquire ArthroCare for $48.25 per share in cash, implying $1.7 billion equity value and $1.5 billion enterprise value, citing complementary portfolios in sports medicine and ENT.[11] The transaction closed on 29 May 2014 after antitrust clearances.[12][13] Smith & Nephew had previously licensed ArthroCare's RF Coblation technology; the acquisition eliminated related royalty payments.[14][15]
Technology
Many ArthroCare products used the company's Coblation technology, in which radiofrequency energy in a conductive medium creates a localized plasma field that ablates soft tissue at relatively low temperatures compared with traditional electrocautery.[16] Randomized and prospective studies have evaluated Coblation in ENT procedures versus electrocautery or cold techniques, with mixed but often favorable findings in pain and bleeding outcomes depending on study design and population.[17][18][19]