Cardinal Health to Acquire The Harvard Drug Group for $1.1 Billion
Ohio-based Cardinal Health (CAH) has agreed to buy Michigan-headquartered The Harvard Drug Group (THDG) for $1.12 billion. According to press releases, THDG, which is currently owned by Court Square Capital Partners, is a distributor of generic pharmaceuticals and over-the-counter medications to retail and institutional customers. The deal is expected to close in the beginning of fiscal year 2016 and will be paid for using existing cash and new debt.
Cardinal Health predicts the acquisition will enhance Cardinal’s generic pharmaceutical distribution and enable specialized packaging offerings to meet the needs of hospital systems and other institutions. Cardinal Health chairman and chief executive officer George Barrett said:
” The Harvard Drug Group aligns perfectly with our commitment to provide the most comprehensive line of pharmaceutical products for the broadest range of customers… This acquisition enhances our ability to support retail and institutional customers and further utilizes Red Oak, our joint venture with CVS Health to source generics…”
According to the press release, the deal includes THDG’s 450 employees and two distribution facilities. THDG had revenues of approximately $450 million in 2014. Cardinal Health projects the acquisition will add 15 cents to Cardinal’s earnings per share in fiscal year 2016.
The deal is not the first announced by Cardinal Health this year. In March, Cardinal announced it would acquire Johnson & Johnson‘s Cordis business for $1.94 billion cash.
St. Jude Medical Acquires Spinal Modulation, Inc.
St. Jude Medical recently announced that it has completed the acquisition of Spinal Modulation, Inc. In June of 2013, St. Jude invested $40 million in Spinal Modulation for which it received an exclusive option (now exercised) to purchase the company for a maximum of $300 million, plus milestone payments. According to St. Jude Medical’s earlier press release, St. Jude Medical agreed to pay Spinal Modulation $175 million upon closing with milestone payments due upon FDA approval of Spinal Modulation’s Axium Neurostimulator System.
St. Jude Medical describes the Axium system (shown to the right) as a form of spinal cord stimulation (SCS) that targets a neural structure within the spine called the dorsal root ganglion (DRG). The DRG contains the primary sensory neurons that transmit pain signals from the peripheral nerves to the brain. The system uses an implantable medical device to deliver mild electrical pulses to the DRG. These pulses mask or interrupt pain signals as they travel to the brain.
According to St. Jude,
[w]ith the closing of the acquisition, St. Jude Medical has become the only medical device manufacturer in the world to offer radiofrequency ablation (RFA), spinal cord stimulation (SCS) and dorsal root ganglion (DRG) stimulation therapy solutions for the treatment of chronic pain.
According to its website, St. Jude Medical is a global medical device company, headquartered in St. Paul, Minnesota, offering a wide array of products in diverse fields.
Spinal Modulation, Inc., headquartered in Menlo Park, California, focuses on providing treatment options for patients suffering severe chronic pain.
Medtronic Continues Expansion After Covidien Acquisition
Medtronic PLC recently announced its acquisition of Advanced Uro-Solutions, a Tennessee-based privately-held developer of neurostimulation products for treatment of bladder control issues. According to the Star Tribune, the terms of the acquisition, which closed in December 2014, were not disclosed.
Medtronic describes itself as a leader in the field of neuromodulation, the targeted and regulated delivery of electrical impulses and pharmaceuticals to specific sites in the nervous system. Medtronic states that its current portfolio includes implantable neurostimulation and targeted drug delivery systems for management of chronic pain, common movement disorders, spasticity, and urologic and gastrointestinal disorders.
Advanced Uro-Solutions manufactures a percutaneous tibial nerve stimulation system called the NURO™. The NURO is promoted for use in therapy that involves a small external stimulator and a single, reusable lead. It is described as providing temporary stimulation to the tibial nerve and treatment to patients with overactive bladder (OAB) and other urinary irregularities. According to the FDA’s 510(k) Premarket Notification Database, the NURO device was cleared by the FDA for the treatment of OAB as being substantially equivalent to a predicate device, the Urgent PC Stimulator (manufactured by Uroplasty, Inc.).
The USPTO Assignment database includes records for three patents and patent applications that have been assigned to Advanced Uro-Solutions LLC, including: U.S. Pat. Pub. No. 2014/0288613, U.S. Pat. No. 8,818,520, and U.S. Pat. No. 8,660,646. Each of these is entitled “Percutaneous Tibial Nerve Stimulator.” FIG. 2 of the ‘646 patent is shown to the left.
Medtronic states that it plans to implement the NURO system in the U.S. within the next 12 months, adding to its portfolio of urinary and bowel control therapies. Medtronic’s acquisition of Advanced Uro-Solutions follows shortly after its recent $49 Billion acquisition of Covidien.
Cardinal Health to Acquire Cordis for $2 Billion
(March 2, 2015) Johnson & Johnson announced that Cardinal Health has made a binding offer to acquire Cordis, a Johnson & Johnson company, for $1.99 billion. The press release indicates that the sale price includes $1.944 billion in cash and $46 million in net receivables. According to Cardinal Health’s announcement regarding the acquisition, it expects the deal to close by the end of 2015. Highlights of the deal can be found here.
According to its website, Cordis manufactures cardiovascular and endovascular products, for example stents, catheters, guidewires, and vena cava filters. According to news articles, Cordis was acquired by Johnson & Johnson in 1996 for about $1.8 billion.
According to its website, Cardinal Health is a health care services company that distributes pharmaceuticals and medical products to healthcare providers and pharmacies. Cardinal Health also manufactures various medical products. Last year, Cardinal Health acquired AccessClosure for $320 million.
Paragon Medical Announces Acquisition of Michael Bubolz GmbH
Paragon Medical recently announced its acquisition of Michael Bubolz GmbH. The acquisition terms were not disclosed. According to the press release, Michael Bubolz, which is headquartered in Germany and has a facility in Poland, manufactures close tolerance surgical instrumentation, a wide variety of orthopaedic implantable components, and also provides complete sterile pack products. Paragon has said that as part of the acquisition, Michael Bubolz’s medical device businesses will be consolidated into its facility in Poland and will employ over 200 people.
Tobias Buck, CEO, President, and Chairman of the Board for Paragon Medical, stated:
This acquisition is yet another stepping stone to enhance Paragon’s position as a strategic partner for the medical device OEM community world-wide, and creates a geographic center of excellence for applications in the trauma, spine, sports medicine and large joint segment of orthopaedics.
According to its website, Paragon Medical is a supplier of solutions for cases and trays, surgical instrumentation (reusable and single-use), implantable components, and design & development services to the medical device marketplace, and has both offices and production facilities in Indiana, Utah, Switzerland, China, and Poland.
Medical Device Market to Reach $361 Billion
According to an article in Medical Design Technology, Kalorama Information’s 2014 report on The Global Market for Medical Devices estimated that the global market for medical devices was expected to reach $361 billion by year’s end, reflecting somewhat slower than expected growth in the industry. Looking forward, the article projects that at an average growth rate of 3%, the global medical device market should grow to $427 billion in 2018.
According to the article, there are many competitors in the global market due to the wide variety of types of medical devices; however, only eighteen companies are responsible for most of the global revenue. Those companies include Johnson & Johnson, GE Healthcare, Siemens, and Medtronic (including Covidien).
The article cites the report as noting that hospitals are the key customer of medical devices with respiratory equipment, catheters, patient monitoring, and dental equipment being the largest categories of medical devices.
The article states that the report notes that areas outside of the U.S., Europe, and Asia represent almost a fifth of the global medical device market. Growth in the market was driven by healthcare spending in countries such as Brazil, Turkey, South Africa, Chile, and Mexico. These import-heavy markets are expected to be a focus of medical device companies in the coming years.
A 2015 Medical Device Industry Survey conducted by the Emergo Group provides additional insight on 2015 medical technology forecasting. The survey indicated that 75% of the 5,400+ survey participants are positive about prospects for the industry in 2015, and that companies expect China and the US markets to perform well in 2015 compared to others. Interestingly, the survey noted that China, Japan, Russia, and Brazil have become more difficult from a regulatory compliance perspective.
DePuy Synthes Announces Acquisition of Olive Medical
By: Mark Speegle
(Feb. 11, 2015) DePuy Synthes, a Johnson & Johnson company, announced its acquisition of Olive Medical Corporation in a press release. The financial terms of the deal were not disclosed. According to its website, Olive Medical is a medical device company specializing in high-definition imagining equipment for minimally invasive surgery.
The press release notes that Olive Medical’s imaging technology is expected to complement DePuy Synthes’s existing Mitek Sports Medicine portfolio, which includes multiple systems designed for surgical use with such visualization technology in the operating room. The press release also stated that the deal will allow DePuy Synthes to integrate Olive Medical’s imaging equipment into its own systems for a single source offering.
According to its website, DePuy Synthes is a worldwide provider of a variety of orthopedic and neurological medical products, and has its North America headquarters in West Chester, Pennsylvania.
US and EU Regulatory Agencies Approve $43B Medtronic & Covidien Merger
Med Device Online reports that Medtronic has been cleared by the Federal Trade Commission (“FTC”) and EU’s European Commission to merge with Covidien. Also according to Med Device Online, the companies had to agree that Covidien would sell Stellarex, its drug-coated balloon stent business division, to Spectranetics for $30M USD in order to obtain FTC and European Commission approval for the merger.
The FTC originally issued an administrative complaint against the merger. The FTC noted in its complaint that C.R. Bard, Inc. is currently the only supplier of drug-coated balloon catheters indicated for the femoropopliteal artery. In addition, Medtronic and Covidien are the only two companies seeking FDA approval for drug-coated balloon catheters indicated for the femoropopliteal artery (both companies are now in clinical trials). Therefore, in its complaint the FTC held that without the sale of Stellarex, Medtronic’s acquisition of Covidien would likely create an unfair and anti-competitive advantage for the companies in that market space. On Nov. 26, 2014, following the companies’ agreement to sell Stellarex, the FTC cleared the merger on unanimous approval.
The European Commission noted that Stellarex, which recently obtained promising results from its first clinical trials, competes directly with Medtronic’s leading drug-coated balloon device, the “In.Pact.” Therefore, despite (or perhaps due to) there being few active competitors in that market, the European Commission found it likely that Covidien would have competitively constrained Medtronic and that the acquisition would remove a credible future competitor from an already-dense market, thereby reducing innovation in the field of drug-coated balloon catheters. Following the FTC’s lead, the European Commission gave its approval of the merger on Nov. 28, 2014.
According to Medtronic, the deal is scheduled to close in early 2015.
According to its website, Medtronic is headquartered in Minneapolis, Minnesota, and operates in more than 140 countries. Medtronic is the world’s 3rd largest medical device company, developing and manufacturing devices and therapies to treat more than 30 chronic diseases, including: heart failure, Parkinson’s disease, urinary incontinence, Down’s syndrome, obesity, chronic pain, spinal disorders, and diabetes.
According to its website, Covidien is headquartered in Dublin, Ireland, and also operates globally. The company, which was spun off from Tyco International in 2007, develops and manufactures medical devices and supplies, for varied applications, including: vascular therapy, airway and inhalation therapy, oximetry and medical monitoring, soft tissue repair, and general surgery.
Cardio3 BioSciences Acquires CorQuest Medical
Cardio3 BioSciences recently announced that it has acquired CorQuest Medical Inc. Financial terms were not disclosed. CorQuest Medical is a U.S.-based company that develops new devices and technologies for cardiac surgery. CorQuest Medical’s co-founder, Dr. Didier De Cannière is the inventor on a number of U.S. Patent Applications directed to establishing a minimally-invasive access route to a patient’s left atrium (for example, patent/applications 1, 2, 3, etc.). Cardio3 BioSciences is a Belgian biopharmaceutical company focused on developing the “Cardiopoiesis platform,” which, according to the company’s website, drives differentiation of multipotent stem cells into new cardiac progenitor cells.
Dr. Christian Homsy, CEO of Cardio3 Biosciences, comments:
As part of our business strategy of building further on our cardiovascular diseases expertise, we have been actively seeking to acquire technologies that complement our existing medical devices for treating severe heart conditions. . . . The development of this technology will enable Cardio3 BioSciences to build on its leadership position in innovative therapies and devices for cardiovascular diseases.
According to Cardio3 BioSciences’ press release, the CorQuest technology platform is fully complementary with Cardio3 BioSciences’ C-Cathez® and C-Cure® programs. Cardio3 BioSciences intends to progress the device through clinical and regulatory approval processes, with the aim of obtaining CE mark approval by the end of 2016.
Valeant Pharmaceuticals Enters Agreement to Acquire PreCision Dermatology
Valeant Pharmaceuticals International, Inc. announced this week that it has entered an agreement to acquire PreCision Dermatology, Inc. According to Valeant’s announcement, Valeant will pay $475 million in cash initially, plus $25 million upon achievement of a sales-based milestone. Valeant expects the transaction to close in the first half of 2014.
According to its website, Valeant is a Canadian-headquartered specialty pharmaceutical company that primarily focuses in dermatology, eye health, neurology and branded generics. According to its website, PreCision is a dermatology company that operates in two key segments – Onset Dermatologics for prescription therapies, and PrecisionMD® for physician dispensed products.
Last month Valeant announced the completion of its acquisition of Solta Medical for approximately $250 million. Zacks Investment Research has reported that Valeant also acquired Bausch + Lomb Holdings Inc. for $8.7 billion in August 2013, Obagi Medical Products for $440 million in April 2013, and Medicis Pharmaceutical Corporation for $2.6 billion in December 2012.
Covidien to Acquire Maker of PillCam
According to the Deal Book, the Jewish Voice, and a Covidien press release, Covidien will acquire all outstanding shares of Given Imaging Ltd. in a transaction valued at $860 million. Covidien has agreed to a purchase price of $30.00 per share, which is 127% of Given’s December 6, 2013 closing price.
According to its website, Given is a Yoqneam, Israel-based company that develops technologies, such as the PillCam 3, for visualizing, detecting and monitoring gastrointestinal disorders. The PillCam 3 is described as a capsule used to “visualize and monitor small bowel abnormalities associated with Crohn’s disease, iron deficiency anemia (IDA) and obscure GI bleeding (OGIB).”
According to Covidien’s Group President, Medical Devices & U.S., Bryan Hanson:
We believe GI is one of the most attractive specialty procedure areas. Acquiring Given will enable Covidien to significantly expand its presence in a $3 billion GI market. . . . Adding Given’s portfolio of diagnostics to our portfolio accelerates Covidien’s strategy of providing physicians with products that support the patient along the care continuum from diagnosis to treatment. It also confirms our leadership in developing less-invasive screening, diagnosis and treatment solutions that can improve patient outcomes and lower healthcare costs.
The Jewish Voice reports that Given made the decision to seek a sale or merger after independent investor Discovery Group recommended that the company auction itself off due to the fact that the company “was chronically undervalued” as a result of “mismanagement.”
Given’s CEO, Nachum Shamir, is reported as providing the following comment on the transaction:
After thoroughly evaluating our strategic options we determined that this transaction is in the best interests of Given Imaging, its shareholders and employees. . . .
The deal is expected to close by March 31, 2014.
Techne Corporation to acquire 100% ownership of Bionostics Holdings Limited
According to a company press release, Techne Corporation has agreed to acquire a 100% ownership stake of Bionostics Holdings Limited and its operating subsidiary Bionostics, Inc. for $104 million in cash.
The press release identifies Bionostics as “a global leader in the development, manufacture and distribution of control solutions that verify the proper operation of in vitro diagnostic (IVD) devices primarily utilized in point of care blood glucose and blood gas testing.” Techne, through its subsidiaries R&D Systems and R&D Systems Europe, describes itself as involved in “the development, manufacture, and sale of biotechnology products and hematology calibrators and controls.”
According to the press release, the acquisition is expected to close in the first quarter of fiscal year 2014. After the close of the transaction, the Bionostics and Techne’s Hematology Division “will collectively operate under a new Clinical Controls Division of R&D Systems.”
The press release states:
Controls for blood glucose and blood gas devices are the largest portion of Bionostics’ business. Bionostics recently launched coagulation device control products and is developing new controls for other growing diagnostic uses, particularly controls for cholesterol and HbA1c point-of-care testing (POCT) devices. Bionostics is positioned to take advantage of continuing growth driven by the increasing prevalence of diabetes and other diseases, the migration of diagnostic testing from the laboratory to the operating room, bedside, clinic, and home points of care, the implementation of controls regulations in global markets and new controls being required for emerging diagnostic and (POCT) products.
Mindray Acquires ZONARE Medical System for $101.7 Million in Cash
News Medical reports that on July 17, 2013, China-based medical device developer and manufacturer Mindray Medical International Limited completed the acquisition of Mountain View, California-based ZONARE Medical Systems, Inc. Under the terms of a June 12, 2013 agreement, Mindray paid $101.7 million dollars in cash for the acquisition.
According to its North American and International websites, Mindray is a Chinese medical device company which develops, manufactures, and markets an array of medical devices. Mindray focuses on patient monitoring and life support products; in-vitro diagnostic products; and medical imaging systems. According to ZONARE’s website, ZONARE develops advanced ultrasound imaging systems for diverse applications, particularly for high-end radiology.
Mindray’s co-chief executive officer, Minghe Cheng, states:
We are pleased to complete this acquisition, furthering Mindray’s goal of becoming a leading provider of high-quality imaging products worldwide. This transaction brings us superior technology that will ultimately accelerate the launch of our next-generation high-end ultrasound product. It also gives us immediate access to the high-end ultrasound market in the countries like U.S., Canada, Scandinavia and Germany. We are optimistic about the transaction and believe we will be better positioned to serve the healthcare market on a worldwide basis for the long run.
Thoratec to Acquire DuraHeart II Technology from Terumo
4-traders reports that Pleasanton, California-based Thoratec Corporation has acquired the DuraHeart II ventricular assist system from Tokyo-based Terumo Corporation for up to $43.5M. The deal has been structured such that Thoratec will pay $13M in cash, upfront, which will be followed by milestone payments contingent upon regulatory approvals and product sales.
According to its website, Thoratec Corporation is the world leader in mechanical circulatory support with the broadest product portfolio to treat the full range of clinical needs for patients suffering from advanced heart failure. Thoratec’s products include the HeartMate LVAS and Thoratec VAD. According to Terumo’s website, Terumo Corporation is a leading medical device manufacturer which develops, manufactures, and distributes world-class medical devices including products for use in cardiothoracic surgery, interventional procedures, and transfusion medicine.
In Terumo’s press release, Yutaro Shintaku, President and Representative Director of Terumo Corporation stated:
Terumo believes that the transfer of the development of DuraHeart II to Thoratec is the best and fastest way to commercialize the technology and to ensure access for patients in Japan, the U.S., and the rest of the world. We are pleased that Thoratec recognizes the value of the DuraHeart II platform and will be applying its expertise and resources to develop and bring this exciting product to market.
Cynosure Completes Acquisition of Palomar Medical Technologies
Cynosure, Inc. announced last week the completion of its acquisition of Palomar Medical Technologies, Inc. According to the press release, Palomar was purchased in a cash and stock transaction valued at approximately $287 million.
Cynosure’s Chairman and Chief Executive Officer Michael Davin stated:
“Combining with Palomar brings together two world class research and development organizations creating what we believe is one of the world’s premier aesthetic laser and light-based companies.”
According to the press release, Cynosure develops and markets laser and light-based treatments for minimally invasive and non-invasive aesthetic applications, such as aesthetic treatment systems to remove hair, treat vascular and benign pigmented lesions, remove multi-colored tattoos, rejuvenate the skin, liquefy and remove unwanted fat through laser lipolysis, reduce cellulite, treat toe fungus and ablate sweat glands.
According to Palomar’s website, Palomar produces cosmetic lasers and intense pulsed light systems to improve the appearance of skin.
Techne to Acquire Bionostics Holdings for $104 million
According to Daily Finance’s Investor Center and a press release from Techne Corporation, medical device manufacturer Techne Corporation is set to acquire a 100% ownership stake in Devens, Massachusetts-based Bionostics Holdings Limited and its operating subsidiary Bionostics, Inc. for $104M in cash. Closing of the transaction is anticipated to occur in the first quarter of fiscal 2014.
According to Techne’s website, Techne develops, manufactures, and sells biotechnology products and hematology calibrators and controls. According to Bionostics’ website, Bionostics develops, manufactures, and distributes control solutions that verify the proper operation of in vitro diagnostic devices, applied primarily to point of care blood glucose and blood gas testing. According to the press release, after the close of the transaction, Bionostics and Techne’s Hematology Division will collectively operate under a new Clinical Controls Division of Techne’s R&D Systems.
Regarding the acquisition, Techne President and CEO Charles Kummeth said:
“We are delighted to add the Bionostics team to our Hematology division. This business is how Techne R&D Systems was founded some 30 years ago and remains thriving today. The addition of Bionostics adds capabilities in exciting new areas like coagulation and expands our controls portfolio, giving us the critical mass we need to remain competitive and offer our customers continued value and options to serve their needs.”
TranS1 Inc. To Acquire Baxano, Inc.
TranS1 Inc. announced today that it will acquire Baxano, Inc., a privately-held company based in California that develops tools to treat lumbar spinal stenosis. According to the press release, Baxano manufactures the iO-Flex® System, a set of flexible instruments that allows surgeons to target lumbar spinal stenosis.
The press release states that TranS1 develops products to treat degenerative conditions of the spine affecting the lumbar region, including the AxiaLIF® family of products for single and two level lumbar fusion, the VEO® lateral access and interbody fusion system, and the Vectre™ posterior fixation system for lumbar fixation supplemental to AxiaLIF® fusion.
According to Ken Reali, President and CEO of TranS1:
Minimally invasive treatments are the fastest growing segment of the spine market. The combination of our AxiaLIF® and VEO® lumbar fusion products with Baxano’s iO-Flex® and iO-Tome™ systems for lumbar direct decompression and facetectomy, respectively, will allow us to better meet the needs of our spine surgeon customers.
AngioDynamics Purchases Ablation Technology
AngioDynamics is going ahead with the purchase of microwave ablation technology from Microsulis Medical, Poststar reports. According to the story, AngioDynamics plans to incorporate the microwave ablation technology into its own technology “in an all-in-one device that offers a full spectrum of ablation technologies on the same cart, called the ‘total ablation solution.’” The story summarizes the terms of the deal:
AngioDynamics will pay $10 million cash initially, to be followed by a $5 million cash payment at the end of 2013, according to a statement issued Wednesday. The Latham-based firm will also assume up to $1 million of liabilities on Microsulis’ books.
According to the story, AngioDynamics President and CEO Joseph DeVivo said that he expects the Microsulis technology to improve a thermal ablation business that generated $23 million in 2012.
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