Boston Scientific Corporation says it is going forward with its option to take over (buy) Cameron Health for $1.35 billion which will be done in separate payments (details below). Cameron Health is a private company located in San Clemente, California, it has developed a unique subcutaneous implantable cardioconverter which does not require leads to pass through veins and into the heart. Cameron’s S-ICD System is placed just below the skin and does not touch blood vessels or the heart.
This ICD (implantable cardioverter defibrillator) is the only one that is commercially available. The device will probably change ICD therapy considerably, offering doctors and suitable patients a new option, other than traditional ICDs. Boston Scientific believes it will enhance its arrhythmia management portfolio.
The S-ICD System considerably reduces the risk of dangerous infections in or near the heart, as well as some other lead-related problems. It has received CE Mark and has been legally on sale in several parts of the world, including most major European markets since 2009.
Over 1,000 patients globally have had the S-ICD System implanted. The US FDA (Food and Drug Administration) granted Cameron expedited review status in its application for approval. According to Boston Scientific, the device will most likely be approved by the summer of 2013.
Cameron Health’s S-ICD System
Hank Kucheman, Chief Executive Officer of Boston Scientific, said:
“With Cameron, we gain a strong, experienced team of professionals who are pioneers in this novel technology, and we are thrilled to welcome them to Boston Scientific. The acquisition of Cameron Health builds on Boston Scientific’s commitment to introducing innovation in the CRM space and represents an important part of our strategy to generate top-line revenue and market share growth.
We believe that the S-ICD System represents a breakthrough treatment for patients at risk of sudden cardiac arrest and strengthens our ability to deliver value to physicians, their patients and healthcare systems around the world.
We expect that the S-ICD System, combined with recent ICD and CRT-D launches, upcoming pacemaker launches, and the recently acquired WATCHMAN® left atrial appendage closure device, will create a compelling and highly differentiated portfolio of arrhythmia management products.”
Kenneth A. Ellenbogen, M.D., F.A.C.C., Professor of Medicine and Director of the Electrophysiology Laboratory at the Medical College of Virginia, said:
“The S-ICD System represents a new category of rhythm management devices that is unlike anything available today. This system provides physicians with a new alternative in the treatment of patients at risk for sudden cardiac arrest and should become first-line therapy for patients who may benefit from not having a lead in the heart.”
Kevin Hykes, President and CEO of Cameron Health, said:
“The S-ICD System was designed to eliminate the complications associated with transvenous leads, creating an important new treatment option for patients at risk of sudden cardiac arrest. We look forward to joining the Boston Scientific team, which will allow us to expand our commercialization efforts and bring this proven therapy to more patients around the world.”
Below are some details on the acquisition agreement:
- $150 million upfront payment to be paid when the takeover is completed
- $150 million when the S-ICD System is FDA approved
- $1.05 billion when certain post-approval revenue milestones are met. This will be spread out over six years, after FDA approval
Boston Scientific Corporation says it will pay all monies out of the business’ cash flow. According to current estimates, Boston expects the transaction to be about $0.01 dilutive in this year, and approximately break-even next year to earnings per share on an adjusted basis.
Written by Christian Nordqvist