Boston Scientific jumps into renal denervation with $425M Vessix buy
|Boston Scientific gets the right to market the V2 renal denervation system with its $425 million acquisition of Vessix Vascular--courtesy of Vessix|
In all the gushing about the market potential of renal denervation technology, Boston Scientific ($BSX) has long been on the outside looking in. That's about to change, as the devicemaker has agreed to pay up to $425 million for Vessix Vascular.
Vessix, a 2012 Fierce 15 company, makes the V2, a CE marked and clinically studied device that can reduce blood pressure in hypertensive patients without the use of drugs. Under the deal, expected to close this month, Boston Sci will pay $125 million up front and up to $300 million in milestone payments through 2017.
Analysts peg the renal denervation market to swell to $2.8 billion worldwide by 2020, and Boston Sci is now a player in the race to cash in on the technologies. The V2 is one of only 5 hypertension-treating devices with a CE mark, competing with offerings from Medtronic ($MDT), St. Jude Medical ($STJ), Covidien ($COV) and the privately held ReCor Medical for a share of the global market.
The deal is the first for Boston Sci CEO Mike Mahoney, who took over Nov. 1, and it's the devicemaker's biggest acquisition of the year. On stepping in, Mahoney said Boston Sci will reverse its flagging sales by unveiling innovative devices to drive revenue, and the V2 fits right in with that mission, he said.
"The acquisition of Vessix Vascular adds a second-generation, highly differentiated technology to our hypertension strategy while accelerating our entry into what we expect to be a multi-billion dollar market by 2020," Mahoney said in a statement.
So, what does $425 million get him? The V2, like other renal denervation devices, works by deadening the nerves in the renal artery and thereby sending signals to the brain to loosen up tension in blood vessels and bring down blood pressure. However, Vessix's balloon catheter can ablate 8 spots at a time in a one- to two-minute procedure, making it about 7 times faster than Medtronic's market-leading Symplicity device, Vessix says.
The V2 is in line for a full commercial launch in CE mark countries early next year, and Boston Sci is planning to start a trial targeting U.S. approval thereafter.
Boston Sci is the third devicemaker to buy its way into the renal denervation space, as Medtronic spent $800 million on Ardian to acquire Symplicity, and Covidien bought Maya Medical in a deal worth up to $230 million to get its hands on the OneShot device.
- read Boston Sci's announcement