Volcano (NSDQ:VOLC) said yesterday that it closed the buyout of AtheroMed and its Phoenix atherectomy catheter system, paying out roughly $116.5 million in cash but netting about $1.7 million in cash on hand from AtheroMed.
The deal includes a $15 million milestone payable upon 510(k) clearance from the FDA before Nov. 15 for AtheroMed’s 2nd-generation Phoenix system, according to a regulatory filing.
Other milestones are also part of the agreement, according to the filing, including "post-closing cash milestone payments based on commercial sales of specified products of AtheroMed and any product combining any AtheroMed product with 1 or more other product, in calendar years 2015, 2016 and 2017."
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 when it announced the deal last month.
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 last month. "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."
Volcano has 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.