Medtronic Bets Big on CathWorks

Medtronic has laid the groundwork to acquire CathWorks, an Israeli company set on transforming the way coronary artery disease (CAD) is diagnosed and treated.

CathWorks has developed the FFRangio System, a non-invasive diagnostic tool turns routine angiogram images into color-coded 3D renderings of blood flow in the heart's arteries. Physicians can then use the images to determine whether a stent is needed.

Through a new agreement, Medtronic will invest up to $75 million and help promote CathWorks' FFRangio System in the United States, Europe, and Japan, where the device is commercially available. A separate agreement gives Medtronic the option to acquire the Kefar Sava, Israel-based company once certain undisclosed milestones are met. CathWorks will also have the right to compel Medtronic to acquire it if Medtronic chooses not to exercise its option. The acquisition option agreement will expire in July 2027 and would be valued at up to $585 million plus potential undisclosed earn-out payments after the deal is done.

Medtronic has had its eye on CathWorks for a while

These agreements shouldn't come as too big of a surprise to Medtronic investors, considering that the Dublin, Ireland-based company has held a minority investment in CathWorks since 2018.

Fractional flow reserve (FFR) is a diagnostic technique that evaluates the physiologic impact of coronary artery stenosis, making it an important part of the decision-making process when managing patients with CAD. While FFR is an important diagnostic tool, supported by strong clinical evidence, the nature of traditional FFR — which requires invasive measurements with wires and stimulation with hyperemic agents— has been a barrier to adoption.

In contrast to traditional FFR, the FFRangio System combines artificial intelligence (AI) and advanced computational science to obtain quick and reliable FFR values from routine angiograms (X-rays), eliminating the need for drug stimulation and invasive pressure wires. This is yet another example of how AI is transforming the medical device world.

"Data and AI-enabled technologies have been shown to drive improved workflow and patient outcomes across the healthcare ecosystem. In cardiology specifically, these new advances in technology provide clinicians with the opportunity to gain additional information to improve and evolve the diagnosis and treatment of patients with CAD," said Jason Weidman, senior vice president and president of Medtronic's coronary and renal denervation business. "We are excited to partner with CathWorks to offer the FFRangio System to our customers. We believe strongly in the potential of the technology and are committed to strengthening our relationship with CathWorks to provide new, innovative technologies and solutions from diagnosis to treatment."

According to clinical data published in the Journal of the American College of Cardiology (JACC): Cardiovascular Interventions, FFRangio showed diagnostic accuracy of 93%, sensitivity of 91%, and specificity of 94%. This non-invasive technology has the potential to disrupt and expand traditional FFR segments. Traditional FFR today represents a product segment of about $750 million and growing at low-double digits.

"CathWorks has been looking for the right partner to help us expand the reach of the FFRangio system globally," said Ramin Mousavi, president and CEO of CathWorks. "Medtronic not only brings the strength of its commercial team to CathWorks, but a reputation of investing and defining new opportunities to revolutionize care. I am excited about the possibilities ahead as we partner with Medtronic to expand the use of our technology to the U.S., Japan and Europe."