Boston Scientific (NYSE:BSX) announced today that it exercised its option to acquire the remaining shares of Farapulse.
Marlborough, Mass.-based Boston Scientific first announced its intent to acquire Farapulse in September 2020, when it signed an investment agreement with an option to acquire the pulsed-field ablation (PFA) technology developer.
Boston Scientific has been an investor in Farapulse since 2014 and currently holds an equity stake of approximately 27%. The transaction to acquire Farapulse includes an upfront payment of approximately $295 million for the 73% stake not yet owned, plus up to $92 million upon achieving certain clinical and regulatory milestones and additional revenue-based payments over the next three years, according to a news release.
The company said that preceding consideration of current equity ownership, debt and other closing adjustments, the total transaction price amounts to $450 million upfront, up to $125 million in achievement-based payments and additional revenue-based payments through calendar year 2023.
Boston Scientific expects the transaction to be slightly dilutive to its adjusted earnings per share in 2021 and 2022, but internal cost efficiencies and tradeoffs should offset it. The company expects the transaction to close in the third quarter of 2021.
“The more than $6 billion electrophysiology market continues to expand, growing double digits year-over-year, and adding this technology to our existing portfolio enables Boston Scientific to be the only company to offer physicians comprehensive therapeutic options they can select based on clinical preference and individualized patient needs,” Boston Scientific SVP & president of its rhythm management business Scott Olson said in the release.
Menlo Park, Calif.-based Farapulse develops its PFA system for treating atrial fibrillation (Afib) and other cardiac arrhythmias. The PFA system includes a sheath, a generator and catheters to ablate heart tissue through a therapeutic electric field instead of using thermal energy sources like radiofrequency ablation or cryoablation.
“The emerging field of PFA has the potential to alter the future of ablation therapy and has shown the promise of improvements in both safety of cardiac ablations for patients and efficiency and ease-of-use of these procedures for physicians,” Boston Scientific SVP & CMO of rhythm management Dr. Kenneth Stein. “The Farapulse PFA system is intended to enable physicians to precisely ablate cardiac tissue while minimizing procedural complications, and real-world and clinical evidence from trials throughout Europe have demonstrated encouraging, positive results.”
The Farapulse PFA system garnered CE Mark earlier this year, while the company initiated an FDA investigational device exemption trial in the U.S. in March. The investigational device is not yet available for sale in the U.S.
“We are encouraged by the positive reception to the commercial launch of the Farapulse PFA system in Europe, which we believe underscores the demand for a simpler way to treat AF,” Farapulse president & CEO Allan Zingeler said. “The strength and breadth of the Boston Scientific team will position this breakthrough technology for success and accelerate progress towards regulatory approval in the U.S.”