Boston Scientific Corporation today announced the signing of a definitive merger agreement, under which the Company will acquire Atritech, Inc., a privately held company based in Plymouth, Minnesota. Atritech has developed a novel device designed to close the left atrial appendage in patients with atrial fibrillation who are at risk for ischemic stroke. The agreement calls for an upfront payment of $100 million plus additional potential payments of up to $275 million upon achievement of specified regulatory and revenue-based milestones through 2015. The purchase price assumes no cash and no debt on Atritech's balance sheet at closing. The upfront payment is expected to be funded with cash on hand. Boston Scientific expects the transaction to be approximately one to two cents dilutive to earnings per share (EPS) on a GAAP basis in 2011, 2012 and 2013, and accretive thereafter; on an adjusted basis, the transaction is expected to be approximately one cent dilutive to EPS in 2011 and 2012, and accretive thereafter. The difference between the estimated impact on GAAP and adjusted EPS relates to amortization expense on acquired intangible assets and the accrual of contingent consideration expense, which are excluded by the Company for purposes of measuring adjusted EPS. Closing of the transaction is subject to customary conditions and is expected to be completed in the first quarter of 2011.
The Atritech WATCHMAN® Left Atrial Appendage Closure Technology is the first device proved in a randomized clinical trial to offer an alternative to anticoagulant drugs -- which are associated with an increased risk of bleeding -- for patients experiencing atrial fibrillation who are at high risk for stroke. Patients with atrial fibrillation are prone to developing blood clots in an area of the heart known as the left atrial appendage. If these clots dislodge and enter the bloodstream they may block circulation to the brain, resulting in a stroke. The WATCHMAN device is designed to close the left atrial appendage, thereby preventing clots within the appendage from being dislodged into the circulation. Atritech has completed PROTECT-AF, an 800-patient randomized clinical trial of its WATCHMAN device that demonstrated a 38 percent relative risk reduction for stroke, cardiovascular death and systemic embolism compared to long-term warfarin therapy. Atritech is currently enrolling patients in the PREVAIL study, a confirmatory study designed to gain U.S. Food and Drug Administration approval. The WATCHMAN device is CE Marked and was commercialized outside the United States in 2009.
"The acquisition of Atritech reinforces Boston Scientific's continued commitment to providing the broadest portfolio of less-invasive devices across the continuum of cardiovascular care," said Hank Kucheman, Executive Vice President and Group President, Cardiology, Rhythm and Vascular for Boston Scientific. "The WATCHMAN device is implanted by both electrophysiologists and structural heart-focused interventional cardiologists. We will leverage expertise from our Electrophysiology and Interventional Cardiology sales forces to drive commercialization of the WATCHMAN device. Atritech will significantly strengthen our product offerings for patients with atrial fibrillation."
"Both Atritech and Boston Scientific believe that the WATCHMAN device offers the best alternative to oral anticoagulation medication for patients who suffer from atrial fibrillation and are at high risk for stroke," said Jim Bullock, President and Chief Executive Officer of Atritech. "We look forward to working with Boston Scientific to expand the left atrial appendage closure market and to bring this technology to more patients worldwide."
"This is an important acquisition in the fast-growing areas of atrial fibrillation and structural heart therapy, both of which are among our Priority Growth Initiatives," said Ray Elliott, President and Chief Executive Officer of Boston Scientific. "Left atrial appendage closure represents a significant growth opportunity for Boston Scientific. We are impressed by Atritech's technology, and we have the sales and marketing infrastructure to help realize the full potential of the WATCHMAN device. Together with other recent acquisitions, we expect Atritech to play a key role in the realignment of our portfolio."
Boston Scientific Corporation