Boston Scientific (NYSE:BSX) is putting up $435 million in cash for Symetis and its line of minimally invasive replacement heart valves, the companies said today.
The buyout halts the 2nd run at an initial public offering by Symetis, which launched the IPO March 20 in a bid to raise up to $66 million (€61.5 million) on the Euronext exchange in Paris. The Ecublens, Switzerland-based company, which acquired Middle Peak Medical and its transcatheter mitral valve implant just last month, spiked its 1st, $96 million IPO attempt in September 2015. Symetis employs about 300 workers worldwide.
During a conference call with analysts, Boston Scientific executives said the company isn’t interested in the Middle Peak assets, which slated for a spin-out ahead of the deal’s closing.
“We currently have other investments in the mitral field,” interventional cardiology president Kevin Ballinger said. “We’re comfortable with other investment areas we have and Middle Peak won’t be part of the process here.”
Boston closed a $75 million deal with Neovasc (NSDQ:NVCN) in December, acquiring that company’s advanced biological tissue business and a 15% equity stake. The company also owns a piece of another mitral valve developer, MValve.
Boston Scientific said the Acurate transcatheter aortic valve implant developed by Symetis would complement its own Lotus TAVI program, which is under a voluntary recall while Boston addresses issues with its locking mechanism. (The Lotus platform is expected to return to market in the 4th quarter.) Symetis won CE Mark approval for the Acurate Neo device in 2014 and is running a clinical trial for the next-generation Acurate Neo/AS TAVI ahead of a bid for EU approval.
“The steps we are taking reflect our commitment to being a leader in TAVI and structural heart technologies now and over the long-term, as we broaden our portfolio and pipeline to address the needs of our global health care providers and their patients,” global chief medical officer Dr. Ian Meredith said in prepared remarks. “The Acurate family of valve products is strongly complementary to our cornerstone Lotus valve platform, and this compelling combination of technologies will allow us to provide interventional cardiologists and cardiac surgeons with multiple TAVI offerings for varying patient pathologies and anatomy.”
“Over the past years, Symetis matured into a TAVI player with fast growth and a solid clinical reputation. The IPO that we were pursuing until yesterday on Euronext Paris was meant to give Symetis the means to commercially expand beyond Europe and to further grow into the exciting field of structural heart. We are very pleased by the positive response we received from the investment community, which we want to thank for the interest it has shown in Symetis. However, as of today, the company is taking another path by joining Boston Scientific. The global scale and strong legacy of Boston Scientific in interventional cardiology will further propel Symetis’ clinical excellence. As a result, we can expect more patients to be better treated for valvular heart disease globally. Moving forward, this means an exciting development path for the Symetis team,” added Symetis CEO Jacques Essinger.
Boston Scientific said it expects the deal, slated to close during the 2nd quarter, to be “immaterial” to adjusted earnings per share this year but “slightly accretive” in 2018 and “increasingly accretive” after that.
The acquisition gets the Marlborough, Mass.-based company onto the European market immediately, Evercore ISI analyst Vijay Kumar wrote in a note to investors. J.P. Morgan analyst Michael Weinstein said the deal is a bit of a head-scratcher and could worry investors about the Lotus program; Symetis posted TAVI sales of $40 million in Europe last year but reported only limited growth over last few years, Weinstein noted.
“This is an offensive rather than a defensive move and not simply a ‘stop-gap’ to address the Lotus recall, shortcomings with Lotus, or IP issues,” Needham & Co. analyst Mike Matson wrote in a client note.
Jefferies analyst Raj Denhoy noted that even though the deal value seems “pretty high,” Symetis sales will likely rise by more than 30% with Boston Scientific’s backing.
BSX shares were down -1.4% to $24.38 apiece today in late-morning trading.
($1 = €0.93)
Material from Reuters was used in this report.
