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St. Jude Medical Buys European Catheter Ablation Firm In a Deal Worth $331M

St. Jude Medical is acquiring a European catheter ablation firm for an upfront payment of $170 million in cash to bolster its electrophyisiology business that includes treatig atrial fibrillation.

August 19, 2013

3 Min Read
St. Jude Medical Buys European Catheter Ablation Firm In a Deal Worth $331M

St. Jude Medical announced Monday that it is acquiring a European catheter ablation company for an upfront payment of $170 million in cash with additional milestone payments of $161 million.

The Minnesota medical device maker is buying Geneva-based Endosense, which has pioneered the force-sensing TactiCath irrigated ablation catheter. The catheter can tell physicians in real time how much force they are applying to a heart wall during a cardiac ablation procedure to repair cardiac arrhythmias.

This knowledge is important, the company believes, because without force-sensing ability, physicians have to estimate how much force is being applied. Too much force can cause tissue injury and procedure complications, while too little force can lead to incomplete lesion formation, which essentially means that atrial fibrillation can recur down the road requiring a repeat ablative procedure.

St. Jude hopes this acquisition would bring the company a technological feature in cardiac ablation that others do not have.

"The acquisition of Endosense further strengthens our industry-leading portfolio of products to treat patients with cardiac arrhythmias, and provides an opportunity to accelerate our market share capture in the $900 million global cardiac ablation catheter market,” said Frank J. Callaghan, president of the Cardiovascular and Ablation Technologies Division of St. Jude Medical, in a news release. “This transaction significantly accelerates our timeline to providing an irrigated ablation catheter that incorporates force sensing in both international and U.S. markets, and has potential future applications across other St. Jude Medical technology platforms as well.”

The TactiCath is already approved in Europe. A principal investigator of the trial that tested Endosense’s force-sensing catheter in the U.S. recently, said that this technology could greatly improve ablation procedures.

“Force sensing is a tremendous advancement in cardiac ablation that will potentially improve safety and efficacy, likely becoming a standard for all cardiac ablations,” said Dr. Vivek Reddy, professor of medicine and principal investigator in the TOCCASTAR trial at Mount Sinai Hospital, N.Y, in a St. Jude news release. “As the first and most studied force-sensing catheter on the market, TactiCath now provides St. Jude Medical with a best-in-class ablation catheter.”

In a research note Monday, Danielle Antalffy, an analyst with Leerink Swann, a healthcare investment bank, hailed the news of the acquisition as a "smart, strategic move" because it:

Closes the technological gap between STJ and Johnson & Johnson, whose Thermocool SmartTouch catheter had positive data at Hearth Rhythm Society (HRS) in May. To us, contact force-sensing catheter technology is the wave of the future for AF (atrial fibrillation) ablation -- as evidenced by the impressive clinical data generated thus far. STJ was previously at a disadvantage by solely pursuing its Verisense RF sensing catheter, which so far has generated very little data. We reiterate our outperfom rating for STJ and expect the Endosense acquisition to further solidify STJ's position as a top competitor in the AF/EP(electrophysiology0 space.
 

Endosense intends to file for a pre-market approval of its force-sensing catheter by the end of the year.

St. Jude’s announcement to buy Endosense comes a week after its in-state rival Medtronic declared that it also was acquiring a company. Yet, the acquisitions could not be more different. While St. Jude is sticking with its strategy of enhancing its core capabilities with technological advances, Medtronic seems to have made a bold move, choosing a path less traveled by buying a disease management, remote monitoring firm based in its home state for $200 million in cash.

[Photo Credit: iStockphoto.com user draco77

-- By Arundhati Parmar, Senior Editor, MD+DI
[email protected]
 

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