Boston Scientific Announces Acquisition of EMcision
On March 5, 2018, Boston Scientific announced its acquisition of EMcision, a privately held company in the United Kingdom and Canada. According to Boston Scientific, this acquisition will expand its range of medical devices in the field of minimally invasive endoluminal procedures as alternatives to conventional surgery. According to Art Butcher, Senior Vice President and President of the Endoscopy Division of Boston Scientific:
As we continue to search for ways to treat pancreaticobiliary cancers, we also seek to improve the quality of life for patients living with a cancer diagnosis today. We are committed to exploring innovative options to help increase the chance of earl diagnosis, improve treatment and advance the ability to remove cancers located in challenging areas of the gastrointestinal tract.
According to EMcision, EMcision was founded by an internationally renowned surgeon and medical device inventor, Professor Nagy Habib, and has developed proprietary medical devices utilizing RF technology for applications such as percutaneous procedures, and open, laparoscopic, vascular, and endoscopic surgeries. EMcision’s devices help patients with advanced cancers located in challenging areas of the gastrointestinal tract for whom surgery is not an option.
EMcision’s website states that EMcision’s flagship product, the Habib™ EndoHPB, is a novel endoscopic bipolar radiofrequency (RF) probe that was the world’s first endoscopic device for tumour ablation via ERCP. The Habib™ EndoHPB has been cleared by the U.S. Food and Drug Administration (FDA) and received CE mark from the EU. EMcision devices are currently being sold in 38 countries around the world and used in most of the top cancer centers in the United States.
With regards to the acquisition, Cherif Habib, EMcision’s outgoing CEO, stated: “By partnering with Boston Scientific, we will continue delivering on our mission of improving the quality of life of cancer patients on much larger scale. Boston Scientific has the resources and the know-how to further improve our technology, expand clinical indications and make it available to may more patients.” According to Yahoo Finance, Boston Scientific’s Endoscopy division revenues rose 14.8% year over year to $436 million in the last reported quarter.
Healthcare Industry May Not Be Prepared For Internet of Things
A recent survey conducted by ZingBox, a Silicon Valley internet security startup, found that more than 90% of healthcare IT networks have Internet of Things (IoT) devices. The survey further found that more than 70% of IT departments believe that current security systems for laptops and servers can also protect connected medical devices.
According to Xu Zou, ZingBox CEO, “Typically you will see 10 to 15 IoT devices per bed in a hospital.” He defines a healthcare IoT device as anything that is portable and connected to the Internet.
This has caused serious problems with medical and other organizations. For example, on May 12, 2017 a ransomware cryptoworm called WannaCry attacked on devices on every continent. An estimated 200,000 computers in 150 countries were infected. The attack included hospitals in England and Scotland and affected up to 70,000 devices, including MRI scanners, blood-storage refrigerators, and theater equipment. Some ambulances were diverted and some non-critical emergencies were turned away.
A more recent global attack occurred on June 27, 2017. Petya (also known as NotPetya), a ransomware cryptovirus, affected largely Ukrainian and Russian hospitals but also hit locations in France, Germany, Italy, Poland, the United Kingdom, and the United States.
In ransomware attacks, malware prevents a user from accessing certain computer records (e.g., patient records). These records are not released until a specified amount is paid to an anonymous recipient. Generally, these types of attacks rely on cryptocurrencies, such as BitCoin. Cryptocurrencies function like paper money, so the transaction is anonymous and difficult to trace.
“Health care has been late to respond to the need for protected information, and the information is worth more,” said Michael Ebert, a partner with KPMG who advised companies on cybersecurity. “It’s amazing how far behind we are, and we know we have to do something.”
Ransomware attacks not only show the vulnerability of hospitals (and healthcare companies generally), but they present a threat to human life. For example, experts have suggested that up to 500,000 children’s medical records are on sale and could be used to compromise the care given to a child.
Ransomware attacks are on the rise. A 2017 Verizon Data Breach analysis found that ransomware attacks rose from the 22nd most common type of malware attack to the 5th most common between 2014 and 2017. “[H]olding files for ransom is fast, low risk and easily monetizable,” wrote the authors. The report noted that 72% of all health care malware attacks in 2016 were ransomware.
Investments into IoT technology is also rising. So far it is at nearly $25 billion and is expected to rise dramatically. Accordingly, the spread of the technology can be expected to increase. Examples within the medical device community include blood pressure and heart rate monitors.
Most of those surveyed by ZingBox may be optimistic about the state of their security. However, the healthcare industry is likely to be more vulnerable in the future as the IoT becomes more ubiquitous.
MedPlast Completes Acquisition of Vention Medical
MedPlast, Inc. recently announced that it has completed its acquisition of Vention Medical‘s device manufacturing services arm. The press release states that the acquisition “broadens MedPlast’s manufacturing capabilities and bolsters its position as a leading services provider to the worlds’ largest original equipment manufacturers.”
According to its website, Tempe, Arizona-based MedPlast is a global provider of plastic processing and manufacturing for medical devices. The company services thermoplastic and elastomeric materials and plastic processing. Vention Medical describes itself as a medical device design, engineering, and manufacturing company. The company specializes in molded components and finished device assembly and packaging of interventional and minimally invasive surgical products.
Harold Faig, CEO of MedPlast sees significant potential in the acquisition. He explains that:
This acquisition is a first and important step in our strategic plan to expand our offering to customers [and o]ur goal is to build on our core manufacturing and engineering capabilities to provide our customers with a comprehensive portfolio of end-to-end product solutions.
The president of Vention Medical’s device manufacturing service arm, Bill Flaherty, shares Mr. Faig’s enthusiasm
We are excited to come together with MedPlast. We serve many of the same customers who will benefit from our combined offerings and shared commitment to providing the highest quality standards and facilities in the industry.
The acquisition was initially announced in late February, 2017. According to the press release, the acquisition:
[W]ill extend MedPlast’s global footprint to 22 manufacturing facilities located in key markets through North and Central America, Asia and Europe. Once complete, the acquisition will more than double MedPlast’s size.
MedPlast’s current acquisition may foreshadow the strategic direction of the company. Kevin Swan, a partner at Water Street Healthcare Partners, a Chicago-based private equity firm backing MedPlast recently stated that “[t]his is the first of what we expect will be more strategic acquisitions to build MedPlast into a market leader.” Indeed, before the acquisition, MedPlast was ranked by Plastic News as the 27th largest injection molder in North America, by revenue, in a $40 billion market for medical device services. At the time, the company had an estimated $275 million in annual sales and 800 employees at 7 manufacturing locations. The company now operates 11 manufacturing facilities.
ICU Medical Buys Hospira Infusion Systems From Pfizer
ICU Medical and Pfizer have reached an agreement to transfer ownership of Hospira Infusion Systems to ICU Medical, according to a joint press release on October 6.
According to the press release, in exchange for the Hospira division, which Pfizer acquired in September 2015, Pfizer will receive $600 million in cash and $400 million in ICU Medical stock. After the acquisition, Pfizer will own approximately 16.6% of ICU. Furthermore, Pfizer will have the right to nominate one director to ICU’s board as long as it holds 10% or more of ICU’s stock.
According to the Hospira Infusion Systems website, its products include IV pumps, solutions, and devices. Vivek Jain, ICU Medical’s CEO, explained that:
“By acquiring the Hospira Infusion Systems business, currently our largest single customer, we create a pure-play infusion business with the focus and scale to compete globally, eliminate our single customer concentration issue, and have a significant value creation opportunity as a much larger company.”
Jain further noted that Hospira has been using ICU’s licensed technology for more than 20 years.
Reuters reported that ICU Medical’s shares jumped 14 percent after the news.
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