(Reuters) – Boston Scientific Corp said on Thursday it will acquire privately-held Vessix Vascular Inc, a developer of a catheter-based device that treats high blood pressure by deadening nerves near the kidneys.
Under the terms of the deal, expected to close at the end of November, Boston Scientific will make an upfront payment of $ 125 million, plus milestone payments of up to $ 400 million between 2013 and 2017. The deal is expected to be immaterial to adjusted earnings in 2013 and 2014, and break-even to profitable thereafter.
One in three adults in the United States has high blood pressure, according to the National Institutes of Health.
Health officials say more than one billion people in the world suffer from the ailment, also known as hypertension, which can lead to coronary heart disease, heart failure, stroke, kidney failure, and other health problems.
Normal blood pressure is below 120/80 mmHg (millimeters of mercury). Hypertension is a reading above 140/90 mmHg.
Despite widespread availability of drugs to treat the condition, blood pressure in many patients remains uncontrolled.
Renal denervation is a procedure in which a thin, flexible catheter is threaded through the body to the renal sympathetic nerves near the kidneys. Radiofrequency energy is delivered to disrupt the nerve activity, relieving high blood pressure.
Renal denervation is expected to be a multibillion dollar market by 2020, according to Boston Scientific, a maker of heart pacemakers, implantable defibrillators and heart stents.
The new therapy is not yet approved in the United States, but several products are available in Europe.
Device makers that have received approval to sell hypertension devices in Europe include frontrunner Medtronic Inc, St Jude Medical Inc, Covidien Plc, ReCor Medical and Vessix, which also has approval in Australia.
“We think the acquisition of Vessix is strategically important as it provides Boston Scientific an entrance point into the valuable renal denervation market and it does so with a product that we think has advantages that will likely make it a viable competitor,” said Wells Fargo analyst Larry Biegelsen, who characterized the market as overcrowded.
Boston Scientific shares were trading at $ 5.16 on the New York Stock Exchange, unchanged from Wednesday’s close.
(Reporting By Debra Sherman; Editing by Jeffrey Benkoe)
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Boston Scientific buys Vessix for blood pressure device
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Boston Scientific buys Vessix for blood pressure device
