Boston Scientific Corp. (NYSE:BSX) agreed to acquire Sadra Medical Inc. in a deal worth $450 million.
The acquisition of Los Gatos, Calif.-based Sadra marks the medical device giant’s entry into the aortic valve replacement market. Sadra is developing a device, the Lotus valve system, that’s designed to replace the valve that can be deployed via catheter; Boston Scientific became a strategic investor in the company in 2005 and owns 14 percent of Sadra, according to a press release.
The deal calls for an upfront payment of $225 million ($193 million after the 14 percent stake is subtracted) and revenue- and regulatory-related milestone payments of up to $225 million more (which also net out at $1193 million).
Boston Scientific, flush from the $1.5 billion sale of its neurovascular business to Stryker Corp. (NYSE:SYK) last month, said it will pay for the Sadra deal with cash on hand.
"This acquisition represents another critical step in the execution of our strategy to realign Boston Scientific’s portfolio," BSX president and CEO Ray Elliott said in prepared remarks. "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."
Boston Scientific has been a strategic investor in Sadra Medical since 2006, along with other backers Accuitive Medical Ventures, Finistere, Firstmark Capital, Oakwood, Onset Ventures, and SV Life Sciences. Sadra drummed up $30 million back May 2009.
Boston Scientific also announced CE Mark approval in the European Union for a trio of its cardiac resynchronization therapy defibrillators and implantable cardioverter defibrillators, the Incepta, Energen and Punctua devices.
BSX shares were trading at $6.68 in mid-afternoon activity, up nearly 2 percent.