Acquisition expected to accelerate growth of St. Jude Medical’s chronic
pain business and strengthen its position as a global leader in
developing therapies to treat chronic pain
ST. PAUL, Minn. & WILMINGTON, Mass.--(BUSINESS WIRE)--
St. Jude Medical, Inc. (NYSE: STJ), a global medical device company,
today announced that it has signed a definitive agreement to acquire
privately held NeuroTherm, Inc., a manufacturer of interventional pain
management therapies, for approximately $200 million in cash.
NeuroTherm is a global leader in the treatment of spinal pain using
radiofrequency ablation (RFA), a segment of the chronic pain market in
which St. Jude Medical does not currently participate. The company
expects to complete this transaction by the end of the third quarter,
subject to customary closing conditions. NeuroTherm is expected to add
approximately $10 million to $15 million to St. Jude Medical’s 2014
sales. Excluding acquisition-related expenses, this transaction will be
neutral to St. Jude Medical’s consolidated earnings per share in 2014
and accretive thereafter on a GAAP basis.
“NeuroTherm’s radiofrequency ablation products are an ideal complement
to St. Jude Medical’s chronic pain portfolio, providing our global sales
force with additional interventional pain therapies that offer potential
relief to patients earlier in the chronic pain continuum,” said Michael
T. Rousseau, chief operating officer of St. Jude Medical. “As the only
medical device manufacturer with both RFA and spinal cord stimulation,
this acquisition will enable us to offer more treatment options to
patients worldwide who suffer from the debilitating effects of chronic
pain.”
Chronic pain affects approximately 1.5 billion people worldwide — more
than heart disease, cancer and diabetes combined. The burden of chronic
pain carries an economic price tag of $300
billion annually in the U.S. and costs €300
billion to European health care systems. In 2013, there were 230
million Americans diagnosed with acute and chronic pain; only about 8
percent of these patients received interventional therapy.
RFA is a minimally invasive procedure that is designed to reduce back
pain by interrupting the nerve supply from painful facet joints in the
neck or back. RFA involves the pinpoint application of heat to destroy
the painful nerve or nerves. The treatment has been used for over 25
years and provides interventional pain therapy to patients earlier in
the chronic pain continuum, often prior to neurostimulation or surgical
intervention.
NeuroTherm’s flagship technology is a multi-lesion RF generator that
allows real-time temperature monitoring and enables continuous delivery
of energy to each site designed to ensure complete treatment of each
targeted spinal nerve. The company’s products are available in over 65
countries.
Christopher R. von Jako, Ph.D., president and chief executive officer of
NeuroTherm said, “St. Jude Medical’s global leadership in chronic pain
represents an excellent opportunity to bring NeuroTherm’s RF ablation
technologies to more pain specialists and patients. We are proud of the
business that NeuroTherm has built and thank our employees and
shareholders for their commitment to developing innovative
interventional pain management therapies. We see a promising future with
St. Jude Medical that combines our products with a leading pain
franchise and further develops the underpenetrated global market for
chronic pain.”
BofA Merrill Lynch is serving as financial advisor and Gibson, Dunn &
Crutcher LLP as legal counsel to St. Jude Medical. Piper Jaffray & Co.
is acting as financial advisor and Calfee, Halter & Griswold LLP is
serving as legal counsel to NeuroTherm.
About NeuroTherm
NeuroTherm is a privately held, leading medical device company that
develops, manufactures, and markets solutions for chronic pain. The
company is focused on delivering minimally invasive solutions and
superior service to its customers in order to realize their shared
vision of improving the lives of patients suffering from chronic pain.
The company offers proprietary solutions including radiofrequency
ablation systems, intradiscal catheters, and a full suite of vertebral
augmentation products. The U.S. Patent and Trademark Office has approved
over forty NeuroTherm patents including five core radiofrequency
technology platform patents, and over twenty additional ancillary
patents are currently pending. NeuroTherm’s products are available in
more than 65 countries with facilities in the metro-Boston area,
Amsterdam, Dusseldorf, and London. For more information, please visit www.neurotherm.com.
About St. Jude Medical
St. Jude Medical is a global medical device manufacturer dedicated to
transforming the treatment of some of the world’s most expensive
epidemic diseases. The company does this by developing cost-effective
medical technologies that save and improve lives of patients around the
world. Headquartered in St. Paul, Minn., St. Jude Medical has four major
clinical focus areas that include cardiac rhythm management, atrial
fibrillation, cardiovascular and neuromodulation. For more information,
please visit sjm.com
or follow us on Twitter @SJM_Media.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 that involve
risks and uncertainties. Such forward-looking statements include the
expectations, plans and prospects for the Company, including potential
clinical successes, anticipated regulatory approvals and future product
launches, and projected revenues, margins, earnings and market shares.
The statements made by the Company are based upon management’s current
expectations and are subject to certain risks and uncertainties that
could cause actual results to differ materially from those described in
the forward-looking statements. These risks and uncertainties include
market conditions and other factors beyond the Company’s control and the
risk factors and other cautionary statements described in the Company’s
filings with the SEC, including those described in the Risk Factors and
Cautionary Statements sections of the Company’s Annual Report on Form
10-K for the fiscal year ended December 28, 2013 and Quarterly Report on
Form 10-Q for the fiscal quarter ended March 29, 2014. The Company does
not intend to update these statements and undertakes no duty to any
person to provide any such update under any circumstance.
Source: St. Jude Medical, Inc.