LeMaitre Vascular Inc. (NSDQ:LMAT) officially exited the stent graft market, taking its ball and $1.3 million home after spiking a distribution deal with Endologix Inc. (NSDQ:ELGX) and selling a pair of brands to Duke Vascular.
Endologix paid the $1.3 million kill fee to cancel a European distribution deal for its PowerLink bifurcated stent graft, which was set to expire June 30, 2013. Irvine, Calif.-based Endologix will distribute the device and related products directly to European customers starting Sept. 1.
"This agreement allows us to accelerate our planned transition to a direct sales force in Europe and gain control of the sales channel at an important time in the development of our European business," Endologix president & CEO John McDermott said in prepared remarks. "It provides us with the opportunity to begin establishing a presence and developing physician relationships ahead of the anticipated European launch of our Nellix endovascular system and Ventana fenestrated stent graft system in 2012."
LeMaitre also announced the sale of its TAArget and UniFit stent graft lines to Duke Vascular for an undisclosed amount, effectively removing the company from the stent graft arena altogether.
"These two transactions mark our exit from the stent graft market, which will allow us to focus on our own core vascular products, where we believe our sales force can drive the most value. We expect that the outcome will eventually be a leaner, faster-growing organization. These transactions will also help offset some of the restructuring payments and charges that we have incurred in recent quarters," chairman & CEO George LeMaitre said in the press release.
The Burlington, Mass.-based cardiac device maker romised to shed its stent graft business by the end of last month in a May 2011 announcement. LeMaitre also shuttered a Laguna Hills, Calif. manufacturing facility it had snagged in last year’s $2.8 million buyout of Angiotech Pharmaceuticals Inc.’s (NSDQ:ANPI) Lifespan vascular graft business.
At the time, company officials said discontinuing the aortic stent graft business would mean $1.1 million in non-cash charges during the second quarter, reducing their sales guidance to $15.3 million for the second quarter. The company also revised its 2011 sales guidance to $61 million and its 2011 reported operating income guidance to $5 million.
McDermott assured investors that the latest deal "will have no impact on our full year revenue guidance," adding that the company continues to expect full year 2011 revenues of $78 million to $82 million.