Blog Tag: Merger
Johnson & Johnson (“J&J”) announced on November 1, 2022, that it will acquire Abiomed for an upfront payment of $380.00 per share in cash, which equates to about $16.6 billion. The acquisition is expected to be completed in the first quarter of 2023. According to reports, after the acquisition, Abiomed “will operate as a standalone business within J&J within Johnson & Johnson MedTech, becoming one of the company’s dozen ‘priority platforms,’ defined by annual sales of at least $1 billion.”
Joaquin Duato, Chief Executive Officer of Johnson & Johnson, stated that “[t]he addition of Abiomed is an important step in the execution of our strategic priorities and our vision for the new Johnson & Johnson focused on Pharmaceutical and MedTech,” and he further stated the acquisition will continue to enhance J&J’s “position in MedTech by entering high-growth segments. The addition of Abiomed provides a strategic platform to advance breakthrough treatments in cardiovascular disease and helps more patients around the world while driving value for our shareholders.” The acquisition follows reports earlier this year that J&J intended to “get active on the medtech M&A front.”
Abiomed was founded in 1981 “for the purpose of developing the world’s first artificial heart. ” Abiomed currently makes the Impella heart pump, which is “a support system of percutaneous catheter-based technology offering hemodynamic support to the heart.” Abiomed also offers the Breathe OXY-1 System, which is a “cardiopulmonary support system with an integrated oxygen concentrator.” Last year, Abiomed acquired the start-up preCARDIA and its catheter technology. Recently, “Abiomed reported revenue of $266 million, up 7% and up 11% in constant currency year over year, the seventh consecutive quarter the company posted double-digit revenue growth in constant currency.”
The press release may be accessed here.
Boston Scientific Agrees to Purchase Majority Stake in M.I.Tech as M&A Deals Are Expected to Pick Up
On June 15, 2022, Boston Scientific entered into a definitive agreement to purchase a majority stake in M.I.Tech Co., Ltd, a publicly traded Korean medical device company in the field of endoscopic and urological procedures. The agreement includes a purchase price of approximately $230 million. According to the announcement, M.I.Tech is the creator of the HANAROSTENT® technology, a family of conformable, non-vascular, self-expanding metal stents. Non-vascular stents can be used in gastrointestinal applications and in airways to clear obstructions or constrictions in areas such as the biliary tree, pancreatic duct, esophagus, colon, and duodenum.
Boston Scientific’s Art Butcher, executive vice president and group president, MedSurg and Asia Pacific, stated:
M.I.Tech is an innovator in non-vascular stent development, with product offerings that complement our existing stent portfolio, including the differentiated AXIOS™ Stent and Electrocautery Enhanced Delivery System and the flexible and conformable Agile™ Esophageal Stent System. We are committed to investing in technologies that advance care for patients around the world and are eager to work more closely with M.I.Tech to expand their international footprint.
Under the agreement, Boston Scientific will be purchasing a 64% stake in M.I.Tech from Synergy Innovation Co., Ltd, whose website identifies M.I.Tech as a subsidiary and a top 5 player in global non-vascular stents. M.I.Tech’s website also describes other products such as lithotripter baskets, polypectomy snares, veterinary stents, and glucometers. The transaction is expected to be completed in the second half of 2022.
According to PwC, semi-annualized M&A deal value in the medical device sector is down 85% this year in comparison to the same period in 2021 when $76.4 billion was invested across 93 deals. PwC attributes the slow-down to acquirers shifting their focus to integration and value capture activities, while the sector deals with regulatory headwinds and semiconductor shortages. PwC expects deals to pick up across all pharmaceutical and life science sectors in the second half of 2022, with the medical device sector searching for alternative forms of revenue, particularly from new consumer-centric technologies.
Nephros is a water technology company, providing filtration and pathogen detection solutions to the medical and commercial markets. Nephros acquired substantially all of GenArraytion’s assets, namely, GenArraytion’s proprietary assays, multiplexing technology, and selection methods for detecting waterborne pathogens and other microorganisms using Polymerase Chain Reaction (PCR) technology. GenArraytion has developed infectious disease diagnostics for hospital-acquired infections and other water safety targets
GenArraytion currently produces MultiFLEX® Bioassays. These bioassays are customizable for detection of “clinical pathogens, tick- and mosquito-borne pathogens, food- and water-borne pathogens and biothreat agents” according to GenArraytion’s website.
The acquisition enhances Nephros’ capabilities for measuring and monitoring waterborne pathogens utilizing PCR testing, and propels Nephros’ abilities to detect and mitigate the spread of infectious disease in premise plumbing.
Waterborne pathogens are a major worldwide public health concern. In addition to developing organisms and new strains from already known pathogens, high prevention and treatment costs present concrete challenges to the public health sectors. The acquisition will allow Nephros to provide on-site testing and data for premise water management.
Nephros issued 123,981 shares of its common stock to GenArraytion, for an aggregate purchase price of $1.2 million. Half of the shares are subject to a risk of forfeiture, which will lapse upon the satisfactory completion of certain intellectual property transition services. Nephros will also make royalty payments to GenArraytion based on net sales of GenArraytion products over the next five years.
Wright Medical Group recently announced the acquisition of IMASCAP SAS for $88 million. According to the press release, Wright Medical Group (NASDAQ: WMGI) is a publicly traded company focusing on extremity joint replacement and bio-orthopedic material development. IMASCAP SAS focuses on developing software for preoperative joint replacement surgery.
According to the press release, the companies have had a previous relationship where Wright Medical Group used IMASCAP’s Genosys technology in its BLUEPRINT 3D planning software. The technology is said to allow surgeons to visualize potential movement in a shoulder joint so as to determine the best type of implant to use. The program is reported to use data provided entirely from a computed tomography scan. The press release notes that using the program allows surgeons to save time during surgery by adjusting their strategy beforehand. Since Genosys’s release in 2014, the company lists its use in 3800 pre-operative planning procedures, by over 1000 surgeons, in 21 countries .
The press release notes that the deal includes approximately $46.9 million in cash, $15.6 million in ordinary shares, and approximately $26.3 million, in potential earnouts and milestone payments for new software and implant systems.
In the press release, Robert Palmisano, President and Chief Executive Officer of Wright Medical Group, stated, “Software-enhanced solutions are the future, and with the acquisition of IMASCAP, we have the opportunity to take a significant lead in this area”.
In a statement by IMASCAP’s Jean Chaoui, President and Chief Executive Officer, “We believe that Wright, with its global leadership position in the extremities market and expertise in medical education and product development, is the ideal partner to realize the full potential of IMASCAP’s technology and product pipeline”.
In its press release, Wright Medical Group also expressed interest in a variety of other technologies under development that could potentially help the company expand into other joint replacement areas. Currently, the company has plans to offer the software free of cost to physicians currently using its shoulder joint replacement technology.
Cosman Medical is a privately held manufacturer of radiofrequency ablation (RFA) systems used to treat patients with chronic pain, the leading cause of disability for adults in the United States. According to the press release, RFA has been used over the last 50 years as a procedure for providing relief for patients with chronic pain by applying heat to small areas of nerve tissue to interrupt pain signals.
According to Boston Scientific, the Cosman Medical team and products will become part of Boston Scientific’s Neuromodulation business, which currently offers Spinal Cord Stimulator (SCS) systems to treat patients with chronic pain. Spinal cord stimulation involves sending electrical signals to the spinal cord in order to mask pain signals from reaching the brain. Some patients find effective relief from RFA, whereas other patients turn to SCS to manage pain. Thus, the acquisition of Cosman Medical adds to Boston Scientific’s portfolio of non-opioid solutions for chronic pain.
Boston Scientific is headquartered in Marlborough, Massachusetts, and the company is a worldwide developer, manufacturer and marketer of medical devices. The company states that its products are used in a range of interventional medical specialties, including interventional radiology, interventional cardiology, peripheral interventions, neuromodulation, neurovascular intervention, electrophysiology, cardiac surgery, vascular surgery, endoscopy, oncology, urology and gynecology.
The U.S. Federal Trade Commission (FTC) recently issued a final order that conditionally approves the merger between Amsterdam, Netherlands-based Tornier N.V. and Memphis, Tennessee-based Wright Medical Group, Inc. Reuters reports that the all-stock transaction is valued at about $3.3 billion. Plans for the merger were first announced in October 2014, and approved by the shareholders of both companies in June 2015, subject to receipt of clearance by the FTC. Progress on the transaction was suspended when the FTC expressed concerns that the merger would reduce competition for total ankle replacements and total silicone rubber (silastic) toe replacements in the U.S. market.
The FTC’s Bureau of Competition enforces U.S. antitrust laws and works with the Bureau of Economics to investigate alleged anticompetitive business practices. On occasion, the Bureau urges the Commission to take law enforcement action. In this case, the FTC’s concerns were the final obstacle to the proposed merger. The recent final order, which follows a mandatory public comment period, settles the FTC’s allegations of anticompetitive behavior.
The order calls for Tornier to sell a portion of its U.S. assets and IP rights to Integra Lifesciences Corporation (NASDAQ: IART), a competitor in the U.S. orthopedics space, which is based in Plainsboro, New Jersey. The newly combined company will be required to provide Integra with ankle and toe replacement products for up to three years. Through this arrangement, the FTC seeks to foster competition in the affected market.
In addition to its upper and lower extremity portfolio, the merged companies will maintain a presence in the growing biologics market. Wright Medical recently obtained FDA approval on the Augment bone graft material (left), which is as an alternative to autograft in a variety of arthrodesis procedures. Tornier has developed a line of biologics that includes its BioFiber line of absorbable scaffolds and its Conexa reconstructive tissue matrix, both of which are used for soft tissue repair.
The U.S. market for cell-based therapies for musculoskeletal injuries (orthobiologics) is valued at over $1.5 billion and is expected to grow significantly in 2016. Other market participants in the orthobiologics space include Dublin, Ireland-based Medtronic (NYSE: MDT), San Diego, California-based NuVasive (NASDAQ: NUVA), Kalamazoo, Michigan-based Stryker (NYSE: SYK), and Johnson and Johnson’s West Chester, Pennsylvania-based DePuy Synthes (NYSE: JNJ). Orthobiologics are part of the growing field of regenerative medicine, which includes bioprinting and stem-cell based therapies, and is projected to be worth $6.5 billion in the U.S. by 2019. Bioprinting, itself, has received recent investment and growth.
Following the merger, the resulting company will be renamed Wright Medical Group, N.V. and will be incorporated and headquartered in the Netherlands.
Greatbatch, Inc. recently announced that it has acquired Lake Region Medical (previously known as Accellent Inc.) pursuant to a deal valued at about $1.73 billion. Reuters reports that Greatbatch will pay $478 million in cash, issue 5.1 million shares of stock to Lake Region Medical shareholders, and assume $1 billion of Lake Region Medical’s debt.
According to The Buffalo News, Lake Region Medical is a private company and OEM manufacturer of minimally invasive medical devices in the Cardio & Vascular and Advanced Surgery markets. Lake Region Medical collaborates with the world’s leading medical device companies to help develop medical devices from concept to point-of-care.
Greatbatch states that the acquisition will create one of the world’s largest medical device OEM suppliers that serves the cardiac, neuromodulation, vascular, orthopedic, and advanced surgical markets. Greatbatch’s press release states that the newly combined entity will employ over 9,000 employees worldwide and generate annual revenues of about $1.5 billion. The combination also adds diversification and scale across product lines, customers, industries, and geography, with the combined entity being able to offer a more comprehensive portfolio to customers backed by a single point of support. According to Greatbatch, the transaction is expected to be finalized in the fourth quarter of 2015 subject to customary closing conditions and pending completion of all necessary regulatory reviews.
Greatbatch is a publicly-traded company (NYSE: GB) that describes itself as providing, developing, and manufacturing medical devices for the cardiac, neuromodulation, vascular and orthopedic markets, as well as batteries for high-end niche applications in the portable medical, energy, military, and environmental markets. According to Buffalo News, Greatbatch has its corporate headquarters in North Texas but maintains a large presence in Western New York, where it has research and production facilities staffed by 750 employees.
According to its website, Vygon designs, manufactures, and markets single-use medical devices for healthcare professionals in hospitals, and for private and independent practitioners. Vygon’s website lists among its offerings vascular access catheters, I.V. administration sets and accessories, anesthesia needles, ventilation tubes, and feeding tubes. According to the press release, Vygon generated revenues of $285 million in 2014 and has a presence in over 100 countries through a network of 25 subsidiaries and 79 distributors.
According to its website, Perouse Medical is a French company that designs, manufactures, and markets medical products for the cardiovascular, interventional imaging, and oncology fields. Perouse’s website states that its product offerings are directed towards cardiovascular medical devices (stents, vascular grafts and patches, radial compression and inflation systems, hemostatic valves, and angiographic syringes) and long-term vascular access devices (implantable ports, PICCs, Huber needles, and catheter maintenance dressings). The press release notes that Perouse Medical generated revenues of $31.4 million in 2014 and has a presence in 90 countries through a network of 200 distributors.
The press release states that the acquisition expands both Vygon’s product portfolio and Vygon’s patent portfolio, strengthening Vygon’s position in the long-term vascular access market, a market worth $2.3 billion and growing annually at 12 percent. Perouse Medical will be the cardiovascular and long-term vascular access specialist unit within the Vygon Group. According to the press release, Perouse Medical’s patent portfolio of 162 patents will also become property of Vygon.
Sorin S.p.A. and Cyberonics, Inc. recently announced that the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for their pending merger has ended. In February, the two companies announced an agreement to merge in an all-stock transaction to result in a combined equity value of $2.7 billion. The transaction was unanimously approved by both companies’ boards of directors, and the merger agreement was signed in March. The deal has now cleared its next hurdle with US antitrust approval. The transaction is still subject to approval by the shareholders of both companies, regulatory clearances, and other closing conditions, and is expected to be completed by the third quarter of this year.
According to its website, Sorin develops, manufactures, and markets medical technologies in the areas of cardiac surgery and cardiac rhythm management. According to its website, Cyberonics has expertise in neuromodulation and developed the Vague Nerve Stimulation Therapy system for the treatment of refractory epilepsy and treatment-resistant depression. The combined company is expected to launch heart failure, sleep apnea, and percutaneous mitral valve replacement/repair products.
Under the terms of the proposed merger, the companies will combine under a new company that will be domiciled in the UK and will operate as three business units – Cardiac Surgery, with operating headquarters in Mirandola, Italy, Cardiac Rhythm Management, with operating headquarters in Clamart, France, and Neuromodulation, with operating headquarters in Houston, Texas.
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.
On August 14, SafeStitch Medical, Inc. announced it has entered into an agreement to merge with TransEnterix, Inc. According to the press release, SafeStitch is a publicly traded medical device company based in Miami, and its mission is to develop disposable medical devices to advance minimally invasive surgery for hernia repair and treatment of obesity and other gastroesophageal disorders. The press release notes that SafeStitch has received FDA approval to market the AMIDTM Hernia Fixation Device for inguinal and ventral hernia repairs.
The press release states that TransEnterix is “pioneering the use of flexible instruments and robotics to improve how minimally invasive surgery is performed.” According to its website, TransEnterix has obtained FDA and CE Mark approval for the SPIDER® Surgical System, which uses flexible articulating instruments to create triangulation via single site access. TransEnterix is based in Research Triangle Park, North Carolina.
The press release notes that according to the terms of the merger agreement, SafeStitch Medical will be the surviving entity, its shareholders will own approximately 35% of the combined company while TransEnterix holders will own approximately 65%, and the company will be headquartered in Research Triangle. According to Yahoo! Finance, the current market capitalization of SafeStitch is approximately $49.36 million.