Covidien (NYSE:COV) and Spectranetics (NSDQ:SPNC) today closed the $30 million deal for Covidien’s Stellarex drug-eluting balloon, following the consummation yesterday of Medtronic‘s (NYSE:MDT) $50 billion merger with Covidien.
Covidien agreed to the deal last November to mollify anti-trust regulators about the Medtronic acquisition.
The agreement with Spectranetics covers the Stellarex angioplasty platform, a drug-eluting balloon used to treat peripheral artery disease that won CE Mark approval in the European Union last month. Spectranetics said it launched the DEB in Europe today and hopes to have it on the U.S. market in 2017 once it’s approved by the FDA.
"This transaction meaningfully enhances Spectranetics’ portfolio," Spectranetics president & CEO Scott Drake said in prepared remarks. "Stellarex is an ideal strategic fit, complementing our suite of highly differentiated cardiovascular clinical solutions designed to enable physicians to cross, prepare and treat the most complex vascular disease. We are excited to have the Stellarex team become part of SPNC. They are an incredible asset and we are proud to advance their work as we continue with the Illumenate clinical trials and product launch.”
Spectranetics has said the Stellarex device could contribute as much as $100 million in annual sales within 2 to 3 years of FDA approval. The buyout is expected to dilute earnings per share next year to the tune of $28.0 million to $32.0 million, or 65¢ to 75¢ per share, "driven primarily by research & development costs associated with the ongoing Stellarex clinical trial program," the company said when the deal was announced last November.
Once it hits the market with Stellarex, Spectranetics will compete with Medtronic and C.R. Bard (NYSE:BCR) in the drug-eluting balloon arena, which Drake today estimated could be worth $700 million to $1 billion over the next 3 years.
Bard won pre-market approval from the FDA earlier this month for its Lutonix peripheral DEB, well ahead of the company’s expectation for approval early next year. Medtronic last month unveiled 1-year data for its DEB platform, the In.Pact Admiral, showing a 2.4% rate of clinically-driven target lesion revascularization at 12 months, compared with a 20.6% rate for patients treated with standard percutaneous transluminal angioplasty.
In June, Spectranetics paid $230 million to acquire AngioScore and its AngioSculpt scoring balloon technology.