Medtronic to Spend $458M to Jump on Mitral Valve Replacement M&A Trend

Following the suit of Edwards Lifesciences and Abbott, Medtronic will buy a transcatheter mitral valve replacement startup for $458 million. 

First it was Edwards Lifesciences.

Then it was Abbott buying two transcatheter mitral valve replacement companies, leading to speculation about a possible wave of acquisitions in te space.

Now medtech heavyweight Medtronic has also jumped on  the bandwagon of acquiring a transcatheter mitral valve replacement company. On Tuesday, the Irish company announced that it is acquiring Twelve for $458 million, including $50 million, which the Redwood City, California startup would receive when its TMVR heart valve system obtains CE Mark in Europe.

Medtronic's move is not surprising.

Analysts believe the market opportunity in mitral valve replacement devices that treat mitral valve regurgitation - where the mitral valve doesn't closely properly leading blood to seep back into the left ventricle of the heart - is large. Glenn Novarro, an analyst with RBC Capital Markets has estimated that the global TMVR market could be worth five times that of TAVR or transcatheter aortic valve replacement, which he projects will be $5 billion in 2020.

Little was known about Medtronic's own internal TMVR program other than the fact that it was being tested on animals. When the deal with Twelve closes in October, the company can now claim that it has a TMVR system being tested on humans. The Twelve implant is enrolling patients in a small pilot study, according to ClinicalTrials.gov. 

"Upon close, this acquisition will strategically augment our existing capabilities in the transcatheter mitral space, which represents an important growth opportunity for Medtronic," said Sean Salmon, senior vice president and president, Coronary & Structural Heart, Medtronic, in a news release. "We have followed the transcatheter mitral valve space closely and firmly believe that Twelve has the most novel technology along with a strong, proven team."

In buying Twelve, Medtronic is shelling out more money than rivals have done, said Larry Biegelsen, an analyst with Wells Fargo. In July, Edwards paid $400 million to buy CardiAQ while Abbott paid $250 million plus additional milestone payments for Tendyne and an undisclosed sum for Cephea Valve Technologies.

Previously, at least one analyst has described CardiAQ's TMVR system has the "best-in-class" valve design. That same analyst - Novarro - also said that CardiAQ's implant is the only TMVR device that has been successfully delivered using both the transfemoral (where the device is snaked through the femoral artery in the leg) and the transapical (where the device is delivered using the apex of the heart) approaches.

Meanwhile, Medtronic is betting that Twelve's dual-stent fixation design is unique and will distinuguish it from rivals. 

Which other startup is left in the mitral valve replacement space that has tested its device on humans? NeoVasc, says analyst Joanne Wuensch, of BMO Capital Markets, which has developed the Tiara device.

Will Boston Scientific pray join the TMVR M&A party?

Arundhati Parmar is senior editor at MD+DI. Reach her at [email protected] and on Twitter @aparmarbb