A Medical Device Daily
Boston Scientific (BSX; Natick, Massachusetts) reported completing its previously disclosed $17.6 million acquisition of CryoCor (San Diego), a company focused on the treatment of cardiac arrhythmias (Medical Device Daily, April 17, 2008).
Under the terms of the transaction, all remaining outstanding CryoCor shares are entitled to receive $1.35 per share in cash. CryoCor is now an indirect, wholly-owned subsidiary of Boston Scientific.
The acquisition follows on the heels of a development agreement between the two companies, in place since June 2007, to pursue therapeutic solutions for atrial fibrillation (AF), the most common cardiac arrhythmia, which affects millions of people around the world (MDD, July 2, 2007).
The development agreement involved the development of a console to deliver cryo energy to Boston Scientific's cryo balloon catheter. The company's cryo balloon is being developed to provide a safe, standardized and broadly applicable method to isolate the electrical activity originating from the pulmonary veins, which are believed to be a source for the initiation and propagation of AF.
CryoCor initially received a hard-won approval for use of its Cardiac Cryoablation System for the treatment of right atrial flutter (AFL), a condition in which the upper chambers of the heart do not pump in synch with the lower chambers, following a 8-2 nod by an advisory panel last June (MDD, June 29, 2007).
It then entered its development agreement with Boston Sci less than a month prior to its formal PMA approval by the FDA, a move that CryoCor CFO Gregory Tibbits admitted to MDD at the time was "enabling a potential competitor," though he noted that the larger firm was still working on feasibility studies of its cryogenic balloon catheter.
Last August, CryoCor became the first company to report the completion of enrollment in a U.S. pivotal clinical study for the treatment of AF (MDD, Aug. 28, 2007), again raising questions as to why the company would sell out so cheaply. The company had enrolled more than 170 patients in its pivotal clinical study and planned to complete a 12-month follow-up for each patient.
Earlier this month, two alleged holders of CryoCor common stock filed a complaint in the Superior Court of the State of California, County of San Diego, naming as defendants each member of the company's board of directors, CryoCor and Boston Scientific.
The plaintiffs purport to bring the action on behalf of a class consisting of all holders of CryoCor common stock, except the defendants and their affiliates
The plaintiffs allege in their complaint that the board of directors of CryoCor, "aided and abetted" by Boston Scientific, breached their fiduciary duties in approving the agreement and plan of merger, dated April 15, by Boston Scientific subsidiary Scimed (Maple Grove, Minnesota) and Padres Acquisition, a wholly owned subsidiary of Boston Scientific/Scimed and CryoCor.
Based on its review of the complaint, CryoCor said that it believes the action is "without merit" and intends, along with its board, to defend the action "vigorously."
In another deal, Natus Medical (San Carlos, California) reported that it has completed its previously disclosed acquisition of Sonamed (Waltham, Massachusetts) for $9 million in cash (MDD, April 16, 2008).
Jim Hawkins, CEO of Natus, said the company expects Sonamed's Clarity screener "to further fill out our product line in newborn hearing screening. With two-thirds of Sonamed's revenue coming from disposable supplies, combined with their high-gross-profit margin, we believe Sonamed's products will be an ideal fit for our business model."
Sonamed makes supplies that aid medical practitioners in screening for hearing loss in newborns.
The privately held company reported revenue of $3.5 million for its year ended Dec. 31 and had cash of about $2.7 million as of the date of the acquisition.
Natus is a provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments such as hearing impairment, neurological dysfunction, epilepsy, sleep disorders and newborn care.
In other dealmaking news: Biomaterials company the Polymer Technology Group (PTG; Berkeley, California) reported that it has in-licensed a family of bioresorbable polymers from Bezwada Biomedical (Hillsborough, Oregon), whose founder and president, Rao Bezwada, PhD, also will serve as a consultant to PTG. Terms of the agreement were not disclosed.
Polymers specifically designed to degrade under physiological conditions are often referred to as "absorbable," "biodegradable" or "bioresorbable" polymers. With this in-licensing event, PTG said it will now be able to offer a wider range of new and generic bioresorbable polymers to the med-tech industry for use in medical devices, drug delivery and tissue engineering.