Medtech titan Boston Scientific (NYSE:BSX) announced today that it acquired IoGyn, maker of the Symphion system for removing intrauterine tissue, for $65 million, not including previous investments.
California-based IoGyn is a pre-commercial company, but it comes with FDA approval for its Symphion device, an alternative to "power morcellation" procedures that were the subject of a recent FDA warning.
Boston Scientific has had its eye on IoGyn for a while and owned a 28% stake in the company prior to the acquisition, in addition to about $8 million in notes receivable. Boston Scientific will pay $65 million at closing to acquire the remaining 72% and repay IoGyn’s outstanding debts. The deal is slated to close within a matter of days.
The purchase comes just days after the FDA warned that laparoscopic power morcellation techniques for removing intrauterine tissue may help spread undetected cancers through the body. Healthcare giant Johnson & Johnson‘s (NYSE:JNJ) and its Ethicon subsidiary announced this month that they suspended sales of their morcellators, although the companies noted that the technology remains an important option for some patients.
Tissue morcellation has come under fire before, with prominent hospitals in Boston and Ohio speaking out late last year against the procedure. The Cleveland Clinic said in December that it would increase its informed consent requirements for patients undergoing the procedure.
Rather than chopping up uterine tissue in order to remove the pieces via a small incision, the Symphion device uses a "recirculating and filtering fluid management system" to resect problem tissue and removes it via suction.
"Boston Scientific is not aware of any reported cases of sarcoma spreading by the surgical removal of tissue within the uterus," the company said.
The acquisition shouldn’t have a material impact on Boston Scientific’s adjusted per-share earnings in 2014 or 2015, but should become mildly accretive beginning in 2016. On a reported basis the deal will have a slight upside for Boston Scientific in 2014 as the company absorbs its previously held equity investment.
BSX closed tonight at $12.95, down 1% on the day. The stock is up 7.7% since the start of the year.