Volcano (NSDQ:VOLC) hopes to change its reputation with the $115 million acquisition of privately held AtheroMed and its Phoenix atherectomy catheter system.
The company, perhaps best known for its imaging technology, plans to broaden its horizons to include more therapeutic technologies, calling the AtheroMed buy an "important milestone" along the way.
AtheroMed’s Phoenix system helps physicians restore blood flow to the ankle and foot with a catheter-based rotating tool that "shaves" material directly into the catheter for disposal. The device is cleared by the FDA and subject to reimbursement in the U.S. and several European countries, Volcano noted.
Volcano hopes the technology will complement its existing portfolio of peripheral technologies and help the company tap into the $350-$400 million global atherectomy market. Volcano’s other peripheral technologies – the Pioneer Re-Entry catheter and Crux vena cava filter – were also acquired in the last 18 months.
"This transaction is an important milestone in Volcano’s strategy to offer a growing and diversified portfolio of therapeutic devices that provide clinical and economic benefits as we continue our evolution from a leader in coronary and peripheral intravascular imaging and physiology to a company providing a broad range of diagnostic and therapeutic solutions," president & CEO Scott Huennekens said in prepared remarks. "We believe the potential of Phoenix to both grow the atherectomy market and achieve a strong market share position will facilitate our revenue, gross margin and operating income expansion goals."
The acquisition includes the up-front cash payment as well as a $15 million milestone payment pending FDA clearance of another Phoenix device currently under review, according to a press release. The deal is slated to close in the current quarter.
Volcano said it’s planning a limited market launch before the end of the year and full market release early in 2015, with manufacturing to begin at AtheroMed’s Menlo Park, Calif., facility and then to move to Volcano’s Costa Rica manufacturing plant in late 2015.
The company did not immediately respond to request for comment about potential layoffs.
