Boston Scientific announced on 19 November 2010 the signing of a definitive merger agreement, under which Boston Scientific will acquire Sadra Medical, a development-stage company in Los Gatos, California.
Sadra is developing the first fully repositionable device for percutaneous aortic valve replacement to treat patients with severe aortic stenosis. The agreement calls for an upfront payment of US$225 million plus additional potential payments of up to US$225 million upon achievement of specified regulatory and revenue-based milestones through 2016. As a result of the company’s existing 14% ownership of Sadra, the actual upfront cash payment by the company will be US$193 million plus additional potential milestone payments up to US$193 million. The purchase price assumes no cash and no debt on Sadra’s balance sheet at closing. The upfront payment is expected to be funded with cash on hand. Boston Scientific expects the transaction to be approximately one to two cents dilutive to GAAP and adjusted earnings per share in 2011, 2012 and 2013, and accretive thereafter. Closing of the transaction is subject to customary conditions and is expected to be completed in the fourth quarter of 2010 or first quarter of 2011.
Sadra has recently completed a series of European feasibility studies of its Lotus Valve System, which consists of a stent-mounted tissue valve prosthesis and catheter delivery system for guidance and placement of the valve. The low-profile delivery system and introducer sheath are designed to enable accurate positioning, repositioning and retrieval at any time prior to release of the aortic valve implant.
“The acquisition of Sadra demonstrates Boston Scientific’s commitment to providing the most complete and advanced portfolio of less-invasive technology solutions across the entire continuum of cardiovascular care,” said Hank Kucheman, executive vice president and group president, Cardiology, Rhythm and Vascular for Boston Scientific. “Structural heart disease – and in particular percutaneous valve replacement – is an important emerging technology for interventional cardiologists, and we believe the Lotus Valve System can offer significant competitive advantages over existing technologies. We are eager to devote our expertise and resources to help make this product available to physicians and their patients.”
“We look forward to building upon our existing relationship with Boston Scientific and working together toward commercial success of the Lotus Valve System, which is designed to simplify and improve the entire aortic valve replacement procedure,” said Ken Martin, president and chief executive officer of Sadra. “Both Sadra and Boston Scientific believe that the unique ability to reposition and retrieve the Lotus Valve provides interventional cardiologists with greater control and allows them to determine if the valve is accurately placed and working properly prior to completing the procedure.”
“This acquisition represents another critical step in the execution of our strategy to realign Boston Scientific’s portfolio,” said Ray Elliott, president and chief executive officer of Boston Scientific. “Percutaneous aortic valve replacement is a fast-growing market within structural heart therapies, and we expect it to be an important part of our growth plan. Sadra’s innovative technology is a natural fit with Boston Scientific’s core competencies in stents and catheter-based delivery systems, allowing us to leverage our clinical expertise and existing sales channels. We will continue to pursue additional Priority Growth Initiatives to strengthen our company by buying or building products we understand, to be sold through sales forces we already have.”
