Medtronic plc and Davita Inc. have agreed to form a new company focused on therapies for renal disease, which will require Medtronic to donate its current kidney care business to the new company. Davita in turn would have to produce $75 million in cash and another $25 million in other assets, but would also have to make as much as $300 million in other payments, depending on the accomplishment of certain milestones. The news comes as Medtronic reports mildly disappointing sales results for the company’s fourth quarter while opening a new front in the two companies’ presence in the renal disease space.
Intersect ENT Inc., of Menlo Park, Calif., picked up Fiagon AG Medical Technologies less than two years ago in a bid to expand its footprint in the ear/nose/throat (ENT) business, but that acquisition is about to be undone. The U.S. Federal Trade Commission (FTC) said Intersect will have to jettison Fiagon because of Dublin-based Medtronic plc’s acquisition of Intersect, thus unwinding a transaction that was valued at €60 million (US$62.4 million) in September 2020.
In sharp contrast with the biopharma industry, the med-tech industry has completed mergers and acquisitions worth a record amount in the first quarter of 2022, with the $63.7 billion combined value towering over every full year prior to 2021.
Acutus Medical Inc. is selling its left-heart access portfolio to Medtronic plc in a deal worth upwards of $50 million. The portfolio of devices includes a line of sheath-compatible septal crossing devices and steerable sheaths. Under the terms of the agreement, Medtronic will make an upfront cash payment to Acutus of $50 million and additional undisclosed payments based on milestones and future sales.
Cochlear Ltd. will acquire Danish hearing implant company Oticon Medical A/S for AU$170 million (US$121 million) after parent company the Demant Group said it planned to exit its hearing implants business. Cochlear CEO Dig Howitt said that Oticon Medical is expected to add AU$75 to AU$80 million to Sydney-based Cochlear’s annual revenue, although Oticon Medical is currently “loss making.” In 2021, Demant’s hearing Implants saw revenue of $73 million.
As biopharma deal values climb, industry M&As are at a five-year low, not yet showing the pickup in 2022 that some analysts expected. BioWorld has recorded 330 deals, including licensings, joint ventures and collaborations, valued at $44.4 billion so far in 2022. That is a 41% increase in volume and a 31% increase in value over the same time frame last year.
Market pressure for M&As in the life sciences sector and the U.S. government’s determination to crack down on anything that smells of antitrust could be on a collision course this year that’s likely to result in injunctions and a lot more litigation.
With U.S. merger filings more than doubling between 2020 and 2021, the Federal Trade Commission (FTC) and the U.S. Department of Justice’s (DoJ) Antitrust Division are seeking public input as they begin to modernize federal merger guidelines to better detect and prevent what they consider illegal, anticompetitive deals.
Avanos Medical Inc. is acquiring Orthogen Rx Inc. for $160 million in a bid to strengthen its chronic pain portfolio. China led the contribution to India’s med-tech imports with ₹91.12 billion (US$1.2 billion) worth of goods in the 2021 fiscal year (April 2020 to March 2021), according to an analysis of data from India’s Department of Commerce by the Association of Indian Medical Device Industry (AIMED).
COVID-19 kept its grip on the world in 2021 as one new variant after another created new waves of infection, forcing regulatory officials to face ongoing political and logistical pressures in dealing with drug and vaccine approvals, mergers and acquisitions, manufacturing issues and demands for pricing reforms.
