Article preview from Start-Up - April, 2012
Three years ago, only Ardian was publicly working on renal denervation devices for hypertension, but at last month’s ACC meeting, some said there were now anywhere from 16 to 40 companies in the space. Fast followers don’t want to miss out on an IP land grab in today’s hottest medical device space.
It’s hard not to see renal denervation as a gold rush of sorts. Three years ago, only Ardian Inc. was publicly working on the new device treatment for resistant hypertension. At March’s annual meeting of the American College of Cardiology, presenters said there were as many as 40 companies staking claims in the space, including Medtronic Inc., St. Jude Medical Inc., Boston Scientific Corp. and a large number of start-ups, all of which are racing to be among the first companies in the market. Overnight, it seems, a nascent field has become crowded and competitive. What happened?
Some eyebrows may have been raised in 2009 when Medtronic and a group of venture investors raised $47 million for Ardian’s Series C round, as the smaller company was developing its novel and therefore risky technology.When Medtronic paid almost $1 billion for Ardian at the end of 2010 ($800 million in cash, $400 million on the back end), it really caused companies to turn heads and, in many cases, strategic direction.
In a device industry where most acquisitions are in the range of $50 to $200 million for companies that already have products on the market, the Ardian acquisition stood out. Such a large sum for a company still in clinical trials was a testament to the fact that Medtronic was buying not just a company but the first-mover in a brand new franchise – a new clinical indication for devices, a novel mechanism of action and an opportunity that some thought might be as transformative as the first angioplasty device, or the first stent, largely because of the tremendous potential size of the market.
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