Boston Scientific (NYSE:BSX) and Neovasc (NSDQ:NVCN) announced a $75 million deal today for the Neovasc biological tissue business that makes components for Boston Scientific’s Lotus replacement heart valve.
The deal, slated to close by the end of the year, also includes a 15% stake in Neovasc, the companies said. Boston Scientific agreed to put up $67.9 million for the biotissue assets and to buy some 11.8 million shares of NVCN stock at 60¢ apiece, for a total of $7.1 million, Neovasc said.
The deal also gives Vancouver-based Neovasc a license to the biotissue assets and access to the plant used to make it so it can sell product to existing customers and use it in its own Tiara replacement heart valve program. That company said it plans to spend the cash on general corporate purposes, likely including its $91 million legal loss to Edwards Lifesciences (NYSE:EW) subsidiary CardiAQ Valve.
The acquisition is not expected to affect Boston Scientific’s earnings in 2016 or 2017, the Marlborough, Mass.-based company said.
“We continually seek ways to optimize our manufacturing processes and enhance our product portfolio,” operations EVP Ed Mackey said in prepared remarks. “The vertically integrated operational capabilities resulting from this acquisition will strengthen our structural heart pipeline and immediately benefit our Lotus valve platform as we work to increase our market share in Europe and prepare for launch in the U.S., expected in late 2017.”
“Boston Scientific has been a long-term customer of Neovasc, having historically represented a sizable percentage of our tissue processing revenues,” added Neovasc CEO Alexei Marko. “As one of the world’s premier device companies, with a global cardio-vascular franchise, this investment in Neovasc enables continued development of our lead products, Reducer and Tiara, and strengthens our resolve to revolutionize how structural heart disease is treated.”
Late in October a federal judge in Massachusetts added $21 million to the $70 million Neovasc owes to CardiAQ in their spat over transcatheter mitral valve replacement technology. The jury in May found that Neovasc misappropriated trade secrets in developing the Tiara TMVR. Edwards inherited the lawsuit when it acquired CardiAQ Valve for $400 million in August 2014.
Last month Neovasc dodged an investor lawsuit brought after its share price plunged in the wake of the court rulings.