BSX grabs ICD startup Cameron Health for $150M+
Boston Scientific ($BSX) is getting serious about shocking its defibrillator sales back to life. The Massachusetts device company has decided to exercise a long-held option to buy Cameron Health, an innovative defibrillator maker, for an initial $150 million.
That price tag could grow by a little more than $1 billion, once Cameron Health's S-ICD system gains FDA approval, and then meets a number of revenue milestones 6 years after that. The device, as Boston Scientific explains, brings ICD technology substantially into the future. Regular ICD devices use thin wires to pass through the venous system and into the heart. But Cameron's product is implanted just under the skin, without touching the heart or blood vessels. It's the first to approach the ICD function this way.
"With Cameron, we gain a strong, experienced team of professionals who are pioneers in this novel technology," Boston Scientific CEO Hank Kucheman said in the company's statement announcing the deal. He added that the product is expected to boost revenue and market share for Boston Scientific's cardiac rhythm management division.
All of this is a pretty fabulous outcome for the San Clemente, CA-based Cameron, which snagged a number of European approvals in 2009, and hopes to gain FDA sign-off for its device by next year. The company made FierceMedicalDevices' list of the top 10 medical device VC deals for the first half of 2011, having raised $107 million to fuel its international commercialization and U.S. approval plans. But Boston Scientific's backing will give those plans a lot more financial muscle.
The deal is expected to close by the second or third quarter, and caps a relationship that began, as The Wall Street Journal notes, when Boston Scientific first invested in the company in 2003. Some analyst firms cited in the WSJ story back the deal announcement, such as Leerink Swann, which said it could transform long-term prospects for Boston Scientific's "lagging" cardiac rhythm management business. Others, like J.P. Morgan, as cited by the WSJ, said the deal helps Boston Scientific, but cautioned that Cameron's device faces a high bar to gain FDA approval because its technology is "novel enough" "that it's likely to generate significant FDA scrutiny." As of March 9, a day after the deal was announced, Boston Scientific's stock price gained about 9 cents, hovering around the $6 mark.
Special Report: Cameron Health - Top 10 medical device VC deals, H1 2011