Waiting until the last minute, Synthes Inc., the West Chester medical-device manufacturer, sold the assets of its Norian subsidiary to Exton-based Kensey Nash for $22 million on Tuesday to satisfy terms of a plea-bargain agreement with the federal government.
The $22 million price tag is only about $1 million less than Synthes paid last year in fines to settle the criminal case in which the company and four executives pleaded guilty to charges that the company ran an illegal "test market" for bone cement, during which three people died.
As part of that agreement, Synthes had to divest Norian's assets by May 24, or face fines and possible exclusion from federal health-care programs such as Medicare and Medicaid. Norian, as a stand-alone company, was going to be excluded, so Synthes will likely just dissolve that corporation. Synthes CEO Hansjorg Wyss declined comment Tuesday night.
Norian's products are surgical implants, including formulations of bone cement. Kensey Nash also bought a 37,000- square-foot manufacturing building, but agreed to lease the space back to Synthes.
In a statement, Kensey Nash said, "As part of a long-term supply agreement, Kensey Nash will manufacture the Norian products, and Synthes will exclusively distribute the products worldwide."
The Office of Inspector General of the U.S. Department of Health and Human Services had responsibility for monitoring whether Synthes lived up to the divestiture agreement. It was unclear Tuesday night whether OIG was satisfied with the transaction.
The manufacturing will shift from Synthes' West Chester facility to a Kensey Nash factory in Exton during the next 18 to 24 months.