Covidien to put at least $50M in new drug-coated balloon acquisition

December 31, 2012 by MassDevice staff

Medical device company Covidien expects to put at least $50 million toward R&D to progress drug-coated balloon technologies its about to acquire from CV Ingenuity.

Covidien logo

Massachusetts medical device company Covidien (NYSE:COV) signed a definitive agreement to acquire drug-coated balloon maker CV Ingenuity, planning to put millions toward R&D over the next 2 years.

The terms of the buyout were not disclosed, but Covidien did say it would spend at least $50 million to develop CV's technologies, breaking that down into at least $20 million in anticipated R&D costs during the 2nd half of fiscal 2013 and another $30 million in fiscal 2014.

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CV's flagship device is a drug-coated balloon platform with proprietary tunable, rapid-release capability designed for "touch-and-go" treatment, according to the company's website.

Covidien doesn't expect have any CV-based technologies on the U.S. market until fiscal 2017, the company noted in a press release.

Despite the extra R&D spending and the undisclosed administrative and acquisition costs, Covidien reaffirmed its previous financial guidance for fiscal 2013.

In November the medical device maker reaffirmed its expectation for sales growth of 3%-6% for fiscal 2013. That would mean revenues of $12.21 billion-$12.56 billion, in line with expectations on The Street, where FY2013 adjusted per-share earnings are pegged to reach $4.42.

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