A Medical Device Daily
Hansen Medical (Mountain View, California) reported that it has signed a definitive agreement to acquire AorTx (Redwood City, California), an early stage developer of catheter-based valve technology.
Hansen said it expects this acquisition to close before the end of this year subject to customary closing conditions. The financial terms of the acquisition include a closing payment of $5 million in Hansen common stock and $5 million in cash. There are also possible milestone payments that total up to $15 million in Hansen common stock and $15 million in cash upon the achievement of regulatory clearances, revenue and partnering milestones. The company believes that this new development program will result in $3 to $5 million of expenditures in 2008 over and above possible milestone payments.
The company said this acquisition will allow it to leverage its Sensei Robotic Catheter system, which is currently marketed for electrophysiology procedures, into the rapidly developing market for percutaneous heart valve therapy.
“It has been a core element of our business strategy to address not only the electrophysiology market, but expand the platform architecture of our Sensei system into applications such as structural heart disease including percutaneous valve replacement,” said Frederic Moll, MD, founder and CEO of Hansen. “This pending acquisition represents another step in a planned accumulation of intellectual property and novel technology to position Hansen Medical for entry into the emerging market for the treatment of structural heart disease.”
Percutaneous valve replacement represents an emerging alternative therapy for high-risk and inoperable patients with severe valve disease, and may offer advantages over open heart surgery. For example, non-surgical heart valve replacement may minimize complications associated with general anesthesia, opening the chest wall and the use of heart-lung bypass machines.
Percutaneous aortic valve replacement using a catheter-based approach may enable surgeons to perform procedures under local anesthesia in a cardiac catheterization lab. This may be a preferred alternative for high-risk valve disease patients who otherwise have no choice but open heart surgery, and more importantly, for those patients with life-threatening valve disease who cannot undergo surgery.
The AorTx heart valve embodies a unique design that consists of a low-profile folded metallic frame, which incorporates a valve made from biologic tissue. The frame, which is positioned in the location of the native valve, unfolds in a precise and controlled fashion, and is deployed into the proper anatomic location in the aortic root. An important element of the design is its ability to be fully retrieved, and if necessary, repositioned before final detachment from the catheter delivery system.
Greatbatch (Clarence, New York) reported that its subsidiary, Electrochem Commercial Power, signed a definitive asset purchase agreement to acquire Engineered Assemblies Corp. (EAC; Teterboro, New Jersey) for about $12 million in cash. The company said it expects to close this transaction sometime this month.
EAC, with operations in Suzhou, China, is a provider of custom battery solutions and electronics integration focused on rechargeable battery systems.
The company said EAC complements and extends the array of markets Electrochem currently serves, such as military and aerospace, oceanographic and seismic surveying, and other industrial markets. In addition to these areas, EAC also supplies power solutions for external medical devices such as automated external defibrillators, infusion pumps, patient monitoring devices and MRI equipment.
The company anticipates that EAC will have annual sales in the range of $20 million to $23 million for 2007. Excluding one-time purchase accounting adjustments, such as in-process R&D charges, earnings are expected to be neutral in 2007 & 2008 and accretive thereafter.
Greatbatch is a developer of critical components used in medical devices for the cardiac rhythm management, neurostimulation, vascular and interventional radiology markets.
In other dealmaking news:
• Siemens (Erlangen, Germany) said it has successfully completed the $7 billion acquisition of Dade Behring Holdings (Deerfield, Illinois).
The laboratory diagnostics company joins the existing business of Siemens Medical Solutions Diagnostics (Tarrytown, New York), a subsidiary of SiemensMedicalSolutions USA (Malvern, Pennsylvania).
The purchase was first disclosed in July (Medical Device Daily, July, 26, 2007).
“The acquisition of Dade Behring, which holds a strong position in clinical chemistry, ideally complements our acquisitions of Diagnostic Products Corporation and Bayer Diagnostics,” explained Erich Reinhardt, member of the managing board of Siemens and president/CEO of Siemens Medical Solutions. “The implementation of integrated IT and clinical solutions from Siemens will help improve workflow efficiency throughout the healthcare enterprise, from admissions and administration, to the laboratory and the radiology department. This will enable our customers to increase the quality of patient care while simultaneously reducing costs,” he added.
• Medtronic (Minneapolis) reported that it has completed its $4.2 billion buyout of Kyphon (Sunnyvale, California).
The deal, initially disclosed by Medtronic in July, was seen as a move by the Medtronic to jump-start its spinal business (MDD, July 30, 2007).
Directors of both companies have unanimously cleared the deal, and Kyphon shareholders signed off on it two weeks ago.
Kyphon shareholders will receive $71 per share in cash for each share of Kyphon common stock they own.
Medtronic said it financed the deal primarily with cash on hand. Kyphon designs medical devices to treat and restore the spine in the U.S. and Europe.
“The product lines and the geographic presence of these two companies are highly complementary,” said Bill Hawkins, president/CEO of Medtronic. “We expect this acquisition to help accelerate the growth of Medtronic’s existing spinal business by extending our product offerings into some of the fastest growing product segments and enabling us to provide physicians with a broader range of therapies for use at all stages of the care continuum.”