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3 Criteria For Being Acquired By Boston Scientific


Posted in Medical Device Business by Arundhati Parmar on February 27, 2014

Boston Scientific, like any device maker, is on the hunt for new and innovative technologies. But what are three criteria it looks for when evaluating an acquisition target? 


acquisition, M&A, purchase

Like any large global medical device firm, Boston Scientific looks to grow through acquisitions, in addition to growing organically.

Last year, the company’s pace of acquisition slowed a bit, said the device maker’s CEO, Mike Mahoney, at a morning medtech gathering in Minnesota Thursday. The event was being co-hosted by Lifescience Alley and the Collaborative, both Minnesota-based organizations.

Mahoney said Boston Scientific made six acquisitions in 2013, including that of CR Bard’s electrophysiology business for $275 million in cash.

So what does it take to be acquired by the company? Mahoney outlined the three major criteria that Boston Scientific looks for.

  • Will the device be reimbursed?
  • What is the regulatory pathway for the product being developed?
  • Can we quantify how we take costs out of the hospital and show the economic value to the hospital?

Reimbursement has emerged to be top on the agenda in the past few years, and Mahoney said that he has seen a lot of promising devices that have CE Mark and even FDA approval but are struggling with reimbursement.

In fact, one company that Boston Scientific has acquired from Minnesota - Atritech - is suffering a similar fate in Europe, where it has CE Mark, Mahoney said. Atritech makes the implantable Watchman left atrial appendage device to treat atrial fibrillation.

Aside from the three criteria, Mahoney talked about how important it is given the current landscape to think of innovation not only as a way to create new devices, but focus on solutions that can be “wrapped around our devices” to help hospitals manage their patient populations and lower costs. One area is heart failure, where IT solutions can be leveraged to monitor patients remotely so that they do not make repeat visits to the ER, he said.

While stressing the importance of these service and solutions-based products, Mahoney wasn’t willing to specify whether the company will invest more into healthcare companies developing these solutions this year as a percentage of overall venture investments.

The company doesn’t provide percentages but “we typically use venture money for opportunities that fall outside our core capabilities,” he said.

And traditionally, medical device makers have only concerned themselves with developing products that are more often used in a hospital setting.

[Photo Credit: iStockphoto.com user draco77]

-- By Arundhati Parmar, Senior Editor, MD+DI
arundhati.parmar@ubm.com

 

 

 


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