Boston Scientific (BSX) signs new contract to purchase Baylis Medical

Boston Scientific Society BSX recently entered into a definitive agreement to acquire Baylis Medical Company Inc. for an upfront payment of $ 1.75 billion, subject to closing adjustments. The acquisition will add the NRG and VersaCross transseptal radiofrequency (RF) platforms as well as a line of guidewires, sheaths and dilators to Boston Scientific’s electrophysiology and structural heart product portfolios.

These platforms feature advanced transseptal puncture and have been clinically proven to improve safety, efficacy and efficiency while crossing the atrial septum to provide therapies such as atrial fibrillation ablation, closure of the left atrial appendage (LAAC) and mitral valve interventions in the left side of the heart.

The recent acquisition of Baylis Medical has the potential to strengthen Boston Scientific’s electrophysiology and structural heart product offerings.

Strategic importance of the takeover

Baylis Medical’s platforms use the RF energy method to provide predictable and safe transseptal access instead of relying solely on mechanical force. The new VersaCross platform further offers similar benefits to streamline transseptal crossing procedures and therapy delivery while eliminating potential wire and sheath exchanges to reduce risk during procedures.

Baylis Medical obtained 510 (k) clearance from the FDA for the NRG platform in 2008. Since then, the technology has been used in over one million procedures. Meanwhile, the company’s VersaCross platform received FDA 510 (k) clearance in 2020. These platforms are complemented by Baylis Medical’s family of guides, sheaths and dilators, which are intended for be used in left side diagnostic, ablation, mitral and LAAC procedures.

According to Boston Scientific management, in addition to complementing the current offerings of the electrophysiology and structural heart portfolios, Baylis Medical is expected to generate significant revenue, operating profit and new research and development capabilities in the multiple businesses of the society.

Financial importance

The acquisition transaction should be finalized in the first quarter of 2022, subject to compliance with the usual closing conditions. This transaction is expected to have an accretive effect on adjusted earnings per share of approximately 1 cent in 2022 and increasingly accretive thereafter.

Due to depreciation charges and net acquisition-related charges, the transaction, based on GAAP, is estimated to be less accretive or dilutive, as the case may be, in 2022 and less dilutive or increasingly accretive by thereafter, as the case may be.

Industry outlook

By a report published in Persistence Market Research, the transseptal access systems market is expected to experience a CAGR of 9.4% through 2031. Factors such as increasing prevalence of atrial fibrillation in developing and developed countries, increase of the geriatric population with high risk conditions such as hypertension, increasing awareness of individuals and advancement of healthcare infrastructure in emerging markets is expected to drive the market.

Given the market outlook, the acquisition of Baylis Medical seems strategic and appropriate for Boston Scientific.

Other developments by Boston Scientific

In September 2021, Boston Scientific announced an agreement to acquire Devoro Medical, Inc. Devoro Medical is the renowned developer of the WOLF thrombectomy platform, designed to target and remove clots without damaging blood vessels and reducing blood loss. This platform is a compelling new alternative for physicians performing thrombectomy procedures.

In the same month, the company completed the acquisition of the global surgical business of Lumenis LTD. a subsidiary of Baring Private Equity Asia. Lumenis’ surgical business consists of top-notch laser systems, fibers and accessories for urology and otolaryngology procedures. This acquisition is expected to add the Lumenis laser portfolio to Boston Scientific’s leading edge offerings for the management of kidney stones and benign prostatic hyperplasia.

Competitive niche

The structural core market is competitive with the presence of leading MedTech players.

In this regard, Abbott Laboratories ABT recently received FDA approval for its Epic Plus and Epic Plus Supra tissue stent valves to improve treatment options for patients with aortic or mitral valve disease. These devices are the latest advancements in the company’s Epic surgical valve platform, and they include innovations that make valve implantation and future cardiac procedures easier.

Medtronic plc MDT announced that it has received FDA approval for its latest generation self-expanding transcatheter aortic valve (TAVR) system. The Evolut FX TAVR system is designed to improve ease of use and provide greater precision and control throughout the procedure. This system maintains the advanced hemodynamic and durability benefits of the Evolut TAVR platform while providing product and procedural innovation for patients with severe symptomatic aortic stenosis.

Edwards Society for Life Sciences EW has made good progress in the structural heart space with increased adoption of RESILIA technologies around the world. In releasing second quarter 2021 results, the company noted significant year-over-year adoption of Edwards RESILIA tissue valves, including the INSPIRIS RESILIA Aortic Surgical Valve, KONECT RESILIA Aortic Tissue Valve Conduit and the newly launched MITRIS RESILIA surgical mitral valve. .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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