Device M&A; Rebound Continues: With Ardian, Sadra Deals Show Appetite For Big, Early-Stage Acquisitions

Article preview from In-Vivo- December 1, 2010

The year looks to be closing strong in terms of device M&A as the rebound we noted last month has continued, highlighted by the recent acquisitions of Ardian, with its novel percutaneous technology for hypertension (and perhaps other conditions), by Medtronic in what could turn out to be a billion dollar deal, and Boston Scientific's leap into the hot transcatheter valve space with its acquisition of Sadra Medical. At a time when acquirers and investors claim to be looking primarily for more mature, commercial-stage companies, these deals indicate that there remains a robust demand for truly innovative devices that address significant unmet needs and markets.

Device M&A Rebound Continues: With Ardian, Sadra Deals Show Appetite For Big, Early-Stage Acquisitions

Article preview from In-Vivo- December 1, 2010

The year looks to be closing strong in terms of device M&A as the rebound we noted last month has continued, highlighted by the recent acquisitions of Ardian Inc., with its novel percutaneous technology for hypertension (and perhaps other conditions), by Medtronic Inc. in what could turn out to be a billion dollar deal, and Boston Scientific Corp.'s leap into the hot transcatheter valve space with its acquisition of Sadra Medical Inc. [201010155] [201010151] These deals also demonstrate that, at a time when acquirers and investors claim to be looking primarily for more mature, commercial-stage companies, and when questions are arising about the innovation model shifting to focus on "good enough" products, there remains a robust demand for truly innovative devices that address significant unmet needs and markets. ( See "In Medical Devices, Is "Good Enough" Good Enough?" this issue [2010800191].) Neither Ardian nor Sadra is close to commercializing products in the US and significant risks remain for both companies, yet Medtronic and Boston Scientific both paid handsome premiums to expand their existing businesses into these promising emerging areas.

The acquisitions add to what already has been an improved year for medical device mergers and acquisitions. ( See "Stryker And St. Jude Acquisitions Signal Year-end Uptick in Device M&A," IN VIVO , November 2010 [2010800187].) The deals also are good news for start-up companies generally by showing that both of these large companies continue to be active acquirers at a time when questions had been raised about both companies appetites for new deals – Medtronic because of the potential need to integrate its recent major acquisitions in transcatheter valves and atrial fibrillation, and Boston Scientific because of the company's ongoing financial concerns.

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