Earlier on Monday, Boston Scientific (NYSE:BSX) announced that it is acquiring Rhythmia Medical, which makes 3D navigational software in cardiac procedures to treat variety of conditions including irregular heart beat for an up front $90 million.
Boston Scientific will pay an additional $175 million provided the Burlington, Massachusetts, firm’s technology wins regulatory clearance as well as meets commercial and sales targets through 2017.
“The acquisition of Rhythmia Medical is a decisive step forward for Boston Scientific in the electrophysiology ablation business, including the high-growth segment of complex ablation,” said Hank Kucheman, chief executive officer of Boston Scientific, in a news release. “Electrophysiology is a $2.5 billion market and growing at a double-digit pace, representing a key growth opportunity for us.”
A Piper Jaffray analyst believes that the acquisition is a good move.
“The [Rhythmica Medical] acquisition helps BSX compete better in the fast growing atrial fibrillation market,” said Thomas Gunderson, a senior analyst who covers Boston Scientific and other medical device firms, in an email. “While [Johnson and Johnson] and [St. Jude Medical] have mapping and navigational products that help electrophysiology labs perform atrial fibrillation ablations, Boston Scientific has been able to compete only on the catheter front, not the imaging segment. Developing their own mapping systeminternally would beriskyand time consuming. Acquiring the technology makes sense to us as BSX continues to re-adjust their product offerings to faster growth segments.”
A report from Millennium Research Group estimates that the U.S. market for electrophysiology mapping and ablation devices is set to grow to $1.6 billion by 2016 largely driven by atrial fibrillation ablation procedures. It also notes
Atrial fibrillation is more common among the growing population of the elderly. An increasing proportion of diagnosed atrial fibrillation cases are being treated via ablation, as both physician confidence and the devices used in these procedures improve. A growing amount of positive clinical data has been demonstrating the efficacy of AF ablation when compared to the traditional first-line treatment of anti-arrhythmic drugs.
As a result, AF ablation will be the fastest growing procedure type in this market, increasing at an average annual rate of 16 percent.
Boston Scientific’s acquisition comes less than three weeks it made another acquisition , this time for use in catheterization labs. It bought BridgePoint Medical, a Minnesota startup, which makes catheters for the treatment of chronic coronary total occlusions. Boston Scientific did not disclose the terms of that acquisition.
[Photo Credit: FreeDigitalPhotos user renjith krishnan]
By Arundhati Parmar
Arundhati Parmar is the Medical Devices Reporter at MedCity News. She has covered medical technology since 2008 and specialized in business journalism since 2001. Parmar has three degrees from three continents - a Bachelor of Arts in English from Jadavpur University, Kolkata, India; a Masters in English Literature from the University of Sydney, Australia and a Masters in Journalism from Northwestern University in Chicago. She has sworn never to enter a classroom again.More posts by Author
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