The Marlborough, Massachusetts-based company will acquire the endoluminal surgical device maker for a cash price of $10 per share. The price reflects an enterprise value of approximately $615 million.
Apollo Endosurgery’s product portfolio includes devices used during endoluminal surgery (ELS) procedures. The ELS procedures close gastrointestinal defects, manage gastrointestinal complications and aid in weight loss. ELS procedures are a less-invasive alternative to open and laparoscopic surgery. It also provides a quicker recovery to minimize the risks of surgical complications. (Earlier this year, our sister site Medical Design & Outsourcing interviewed Appollo Endosurgery’s chief medical officer and R&D VP about their technology.)
“Endoluminal surgery is an emerging field and a core focus for our Endoscopy business,” Mike Jones, senior VP and president of endoscopy at Boston Scientific, said in a news release. “We intend to expand our global capabilities in ELS with the differentiated innovation that Apollo Endosurgery offers, and we will continue to focus on procedural adoption as well as professional education in this exciting space. This acquisition also enables us to enter a new adjacency – the endobariatric market – and deliver strong, continued growth across our business.”
Apollo Endosurgery anticipates net sales of approximately $76 million in the fiscal year 2022. It expects significant growth of its endoscopic suturing system franchise, which includes the OverStitch and OverStitch Sx endoscopic suturing systems and the X-Tack endoscopic HeliX taking system.
More about Boston Scientific’s plans to acquire Apollo Endosurgery
Boston Scientific expects to complete the transaction in the first half of 2023, which is subject to satisfaction of customary closing conditions. Company officials project that adjusted earnings per share will be immaterial in 2023 and accretive thereafter. GAAP earnings per share will be less accretive, or more dilutive, due to amortization expenses and acquisition-related net charges.
Senior research analyst Mike Matson of Needham & Co. wrote in a note that the planned acquisition complements Boston Scientific’s endoscopy franchise. He reiterated a Buy rating on BSX shares. He said the deal leverages Boston Scientific’s gastroenterologist call point while offering expansion potential into surgical endoscopy and bariatric surgery.
Truist analysts also appeared upbeat about the acquisition. They said it will strengthen Boston Scientific’s GI portfolio. In addition, they think it will expand the company’s reach into an $800M endoluminal surgery market opportunity and the rapidly growing bariatric surgery segment.
BSX shares were up more than 1% to $44.28 apiece in morning trading today. APEN share rocketed up more than 64% to %9.90 apiece. MassDevice’s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was up more than 5%.