Framingham, Mass.-based HeartWare said it paid $12 million in cash to settle CircuLite’s outstanding debt and issued another $18 million worth of HTWR shares to consummate the deal, which closed Dec. 1.
The deal also includes provisions for a series of milestone payments pegged to regulatory and sales goals, including the resumption of sales of the Synergy device in the European Union. CircuLite warned last summer that the inflow cannula on the Synergy pump can fracture.
"The partial-support system developed by CircuLite represents the industry’s most intriguing platform for the treatment of patients with earlier-stage heart failure," HeartWare president & CEO Doug Godshall said in prepared remarks. "CircuLite has pioneered the partial-assist approach and demonstrated that this technique can significantly enhance the quality of life for this group of patients, which is believed to be a substantially larger population than the end-stage heart failure patients that HeartWare currently treats with our full-support Ventricular Assist Devices. CircuLite’s next-generation endovascular system, which will be implanted collaboratively by cardiologists and surgeons in a hybrid cath lab setting, offers an extremely compelling interventional approach to circulatory support. While our HVAD and MVAD systems offer minimally invasive treatment to end-stage heart failure patients, the Synergy platform offers even less invasive and ultimately interventional options to earlier-stage heart failure patients."
"We are confident that HeartWare’s technical, regulatory, sales and marketing capabilities will have a profound impact on enabling the SYNERGY system to reach its full potential," added Dr. Daniel Burkhoff, CircuLite’s chief medical officer. "There is considerable opportunity for the current SYNERGY system, and through continued investment and innovation, we believe we could expand the circulatory support market with the launch of a groundbreaking, endovascular treatment for patients with earlier stage heart failure."
HeartWare said it will issue $20 million worth of stock once the Synergy pump is back on the market in the EU. Another $75 million cash or stock payment is due after CE Mark approval of an interventional system (the current CE Mark is for ambulatory heart patients who haven’t responded to standard treatment).
A cash or stock payment of $50 million is due when the interventional system wins pre-market approval from the FDA. Once annual sales of the Synergy device reach $30 million, HeartWare said it will put down another $15 million cash or stock payment. A 5th, $85 million cash or stock deposit is due after annual sales reach $250 million. And there’s another $75 million on the line in further milestones pegged to sales.