Boston Scientific Corp. (NSYE:BSX) agreed to acquire Plymouth, Minn.-based Atritech Inc. for $100 million in cash plus milestone payments of up to $275 million more through 2015.
Atritech’s CE Mark-approved Watchman device is designed to close the left atrial appendage in patients with atrial fibrillation who are at risk for ischemic stroke.
In November 2010, Atritech began enrolling patients in its Prevail clinical study, aiming to win a nod from the Food & Drug Administration for the device. It would be the first LAA closure device to reach what could be a $1 billion U.S. market in the next few years, Leerink Swan analyst Rick Wise wrote in a note to investors.
"Although Atritech is a small deal for BSX, we believe this is an interesting take on a potentially compelling new market. That market’s potential now is essentially being validated by two large cardiology players (BSX and [St. Jude Medical Inc. (NYSE:STJ)]). STJ’s recent AGA purchase — whose new product pipeline also includes LAA closure technology — along with BSX’s announcement today could suggest that the the LAA closure opportunity is indeed real," according to Wise.
The deal is part of Boston Scientific’s efforts to broaden its portfolio of less-invasive cardiovascular devices.
"This is an important acquisition in the fast-growing areas of atrial fibrillation and structural heart therapy, both of which are among our Priority Growth Initiatives," CEO Ray Elliott said prepared remarks. "Together with other recent acquisitions, we expect Atritech to play a key role in the realignment of our portfolio."
The acquisition is Boston Scientific’s second of the year and the third in a series of small deals.
The Asthmatx, Sadra and now Atritech buyouts are "all clearly designed to increase BSX’s options on potential large, new, faster-growing market opportunities," Wise wrote.
Two weeks prior to the Atritech announcement, Boston Scientific announced a $78 million takeover of Boston-based neuromodulation technology developer Intelect Medical Inc., only weeks after taking its own pain management business off the market.
The Natick, Mass.-based medical device giant gained significant leverage for the M&A market when it wrapped up the $1.5 billion sale of its neurovascular business to Stryker Corp. (NYSE:SYK) in the first week of January.
BSX shares were down about 1.4 percent to $7.23 in late-morning trading.
