Boston Scientific has struggled to gain share in the $4.4 billion electrophysiology (EP) market, but a new deal should give it a much-needed boost.
The Marlborough, MA-based company said it will pay up to $300 million for Apama Medical, a privately-held firm that is trying to treat atrial fibrillation (AF) with a radiofrequency (RF) balloon that combines the best of catheter- and balloon-based ablation. The deal calls for an up-front cash payment of $175 million and another $125 million payment based on clinical and regulatory milestones expected over the period of 2018 through 2020. The acquisition is expected to close in the fourth quarter.
AF is a common heart rhythm disorder estimated to affect more than 33 million people worldwide. Current treatment options include anti-arrhythmic drugs, and cardiac ablation, which is the delivery of energy to the areas of the heart muscle causing an abnormal rhythm. The standard of care in AF ablation is pulmonary vein isolation (PVI), Boston Scientific said, which is the application of energy to create lines of scar tissue around the pulmonary veins in the left atrium to block unwanted electrical signals that trigger AF.
PVI is currently performed using either point-by-point RF-based ablation or single-shot balloon-based ablation. Campbell, CA-based Apama is developing a technology that combines these two approaches. The Apama RF balloon is a single-shot, multi-electrode device designed to deliver differentiated levels of energy and shortened procedure times. The technology incorporates built-in digital cameras with LED lights and sensing electrodes on the balloon. This is intended to give the physicians more confidence of effective energy delivery and the ability to customize the amount of energy delivered around the circumference of the balloon. According to the company, this would also help to reduce procedure times compared to existing balloon technologies.
The proposed acquisition is consistent with comments that CEO Mike Mahoney made during Boston Scientific’s second-quarter earnings call in July. The company grew EP sales 13% last quarter, led by improved uptake of its new Rhythmia HDx mapping system that is being rolled out in Europe, the United States, and Japan.
Mahoney also noted other devices in the pipeline that are expected to boost the EP business in the near-term, including two new therapeutic catheters, and a new force-sensing technology enabled by a software upgrade for the Rhythmia mapping system.
“So, we are committed to this EP business, and we continue to – I hate to use the word ‘slowly,’ but we are improving the platform and the product portfolio globally each quarter,” he said.
One of the new catheters, the IntellaNav MiFi OI, in combination with Rhythmia HDx, is expected to serve as the foundational platform for the company’s DirectSense technology, added Kenneth Stein, MD, the chief medical officer of rhythm management and global health policy at Boston Scientific.
Regarding the Apama deal, Stein said study results show that the Apama RF balloon is an advancement in single-shot technology for PVI and can provide physicians with greater control and efficiency when performing AF ablation.
The device would be integrated with the Rhythmia HDx mapping system, according to Joe Fitzgerald, president of rhythm management at Boston Scientific.
In a first-in-human study, the Apama RF balloon met safety and efficacy endpoints in patients with paroxysmal AF. The device is currently being studied in Europe and the company said CE mark approval is expected in late 2018.
While these results are encouraging, according to Mike Matson of Needham & Company, the analyst said there is still a risk that the larger CE mark and U.S. pivotal trials could fail. Assuming Boston Scientific waits until the end of its CE mark trial to begin a U.S. pivotal trial, he added, a U.S. launch might not be until 2021 or later.
Still, the acquisition could spell trouble for competitors like Abbott, which lacks a single-shot ablation technology, and for Medtronic, which has been gaining share with its Arctic Front cryoballoon, he said.