Continuing its drive to provide heart-support devices across a broad continuum of care, Abiomed (Danvers, Massachusetts) has agreed to acquire Impella CardioSystems (Aachen, Germany), manufacturer of the Recover System line of heart pumps used to stave off cardiogenic shock following heart attack or myocardial infarction.
Abiomed will acquire Impella for about 4.04 million shares of its common stock and around $1.8 million in cash. It also may make additional contingent payments to Impella shareholders based on stock price performance, unit sales and FDA approval milestones, which could range up to about $29 million.
Abiomed has been known primarily as the developer of the AbioCor totally implantable replacement heart. But Mike Monogue, company president and CEO, has put greater emphasis than his predecessor – company founder David Lederman – on sending heart patients home “with their own hearts” rather than the replacement type.
“A huge focus is to recover the heart,” Minogue told Medical Device Daily, a focus that the company is pursuing more aggressively as it awaits the hoped-for approval of an investigational device exemption for the AbioCor in June (MDD, April 22, 2005).
Importantly, acquisition of Impella also will take Abiomed into the cath lab, offering a large potential market upside. “This is the first time Abiomed has entered into the cath lab directly,” Minogue said.
Impella manufactures “the world’s smallest, minimally invasive, high-performance micro blood pumps with integrated motors and sensors for use in interventional cardiology and heart surgery,” Abiomed said. These devices are used in the cath lab and are inserted percutaneously, much like a standard balloon pump procedure, to help restore blood flow.
“Do the math,” Minogue said. “This is a huge need today.”
That math, he noted, includes 1 million people in the U.S. needing better blood flow support following a heart attack, and 1.8 million worldwide, with the Impella technology offering an alternative to riskier cath lab procedures.
Impella has CE marks for each of its devices and markets them throughout Europe. During a late-Wednesday conference call, the company estimated that sales in Europe for 2005 will be about $5 million, or about double the 2004 sales.
Javier Jimenez, vice president of operations for Abiomed, said that since the Impella pumps are still not commercially approved in the U.S., the transaction will not yet push Abiomed to profitability for fiscal 2006. He said additional FY06 information will be provided during the company's May 31 conference call.
An IDE application has been made to the FDA for the 5 liter-flow version of the pump, Minogue said, and Abiomed is preparing an IDE application for the 2.5 liter pump.
The sought-for U.S. approvals will be based on clinical experience in Europe and proposed U.S. trials, Minogue said.
“The acquisition of Impella fits perfectly with our strategy of providing cardiac support and circulatory assist to patients throughout all areas of the hospital,” he said. “We will now be able to provide a continuum of devices that increase the likelihood for recovering a patient’s natural heart, beginning in the cath lab and continuing through the surgical suite.”
He noted also that the deal would enable Abiomed’s expansion in Europe and “a strong foundation in Germany. Now, as a company, we will protect, recover and replace failing hearts.”
Dr. Thorsten Siess, chief technology officer for Impella, said, “We believe that our base of 50 employees and strong patent estate strengthens Abiomed’s overall strategy, while Abiomed provides an impressive commercial platform from which to market the Recover technologies in the U.S. and globally.”
The transaction is subject to customary closing conditions.
For the past two years Impella has been affiliated with Accelerated Technologies (ATI; Hackensack, New Jersey), a medical device accelerator. ATI issued a statement saying that the deal validates its “unique acceleration model” for medical device companies.
The company’s investors include Oxford Bioscience Partners, Medica Venture Partners, ABN Amro and Giza Ven-ture Capital, as well as company management, employees and directors.
In other dealmaking:
• The acquisition of Guidant (Indianapolis) by Johnson & Johnson (J&J; New Brunswick, New Jersey) took another step forward yesterday with a thumbs-up given to the merger by Guidant shareholders. Guidant said that its shareholders “overwhelmingly approved” the $24.5 million deal, unveiled in mid-December (MDD, Dec. 17, 2004).
Guidant said in a statement that terms of the agreement provide for a collar that could value the acquisition price at either more or less than the announced price of $76 a share. The announced price reflects $30.40 in cash and $45.60 in J&J common stock per share, provided the volume weighted average trading price of J&J common stock is between $55.45 and $67.09 during the 15-day trading period ending three days prior to the transaction closing. Outside this range, each Guidant share exchanged will be converted into a fixed number of shares of J&J common stock equal to .8224 shares or .6797 shares, plus $30.40 in cash. On Tuesday, the closing price for J&J common stock was $68.02 a share.
The agreement remains subject to European and U.S. regulatory reviews and other customary conditions.
• Thermo Electron (Waltham, Massachusetts) reported purchasing Rupprecht and Patashnick (R&P; East Greenbush, New York), a developer of particulate monitoring instrumentation for the industrial hygiene, ambient air and emissions monitoring markets. Financial terms were not disclosed.
Marijn Dekkers, president and CEO of Thermo Electron, called R&P “well positioned to address future particulate monitoring regulations that will impact the emissions and ambient air monitoring markets, both of which are core to Thermo. Their product offering is an excellent complement to our existing portfolio of gas analyzers and particulate monitoring instruments, and will significantly enhance Thermo’s global position in these markets by creating a supplier with a strong portfolio of instrumentation and service capabilities.”
He added that the R&P acquisition “strengthens our ability to meet our customers’ current and future compliance, health and safety needs and reinforces our commitment to be the world leader in analytical instrumentation for environmental applications.”
Established in 1981, R&P had 2004 revenues of $17 million. R&P will become part of the Air Quality Instruments product line within Thermo’s Environmental Instruments division.
Thermo Electron bills itself as a world leader in the development of analytical instruments.