Hit by an industry-wide slowdown in its major markets for cardiac stents and cardiac rhythm devices, Boston Scientific yesterday announced its acquisition of California-based development-stage Sadra Medical, Inc for $386 million.
The deal gives Boston Scientifiic an entry into the $2-billion market for implantable heart valves using transcather techniques that do away with open hear surgeries.
Privvately-held Sadra Medical, founded in 2003, is developing the first fully repositionable device for percutaneous aortic valve replacement to treat patients with severe aortic stenosis.
Under the terms of the agreement, Boston Scientific will make an upfront payment of $225 million from its cash reserves folowed by additional potential payments of up to $225 million upon reaching specified regulatory and revenue-based milestones till the end of 2016.
However, since Boston Scientific already owned a 14-per cent stake in Sadra as a strategic investor since 2006, its actual upfront cash payment would be $193 million plus additional potential milestone payments up to $193 million, it said in a statement.
The other investors in Sadra include Accuitive Medical Ventures, Finistere, Firstmark Capital, HealthCor Partners, Incept LLC, Oakwood, ONSET Ventures and SV Life Sciences.
The purchase price assumes no cash and no debt on Sadra's balance sheet at closing and Boston Scientific said that it expected the transaction to be approximately one to two cents dilutive to GAAP and adjusted earnings per share in 2011, 2012 and 2013, and accretive thereafter.