Boston Scientific has agreed to buy privately-held Rhythmia Medical, Inc., which makes mapping and navigation technology to use in cardiac catheter ablations and other electrophysiology procedures – including atrial fibrillation and atrial flutter.
Rhythmia Medical is based in Burlington, MA.The transaction is expected to close by Friday, October 12th.
"The acquisition of Rhythmia Medical is a decisive step forward for Boston Scientific in the electrophysiology ablation business, including the high-growth segment of complex ablation," Boston Scientific CEO Hank Kucheman said in a statement. "Electrophysiology is a $2.5 billion market and growing at a double-digit pace, representing a key growth opportunity for us. Rhythmia Medical has a strong and impressive team, and its technology is expected to add innovation and breadth to Boston Scientific's suite of solutions in this strategically important space."
Atrial fibrillation is a disorder that disrupts the ability of the heart to beat regularly and pump blood efficiently. Approximately 15 million people worldwide are affected. Catheter ablation enabled by three-dimensional mapping and navigation is commonly used to treat many heart rhythm disorders, including atrial flutter and atrial fibrillation.
"Rhythmia Medical's revolutionary mapping technology is expected to significantly enhance physician treatment options and ultimately facilitate and improve what today are long and complicated procedures," said Doron Harlev, co-founder and co-chief executive officer of Rhythmia Medical. "Our system is expected to become a very promising tool for physicians to treat patients with complex cardiac arrhythmias. We are excited to combine our mapping system with Boston Scientific's strong catheter platform and commercialization capabilities."
Once the mapping system is cleared by the U.S. Food and Drug Administration and receives CE Mark approval in Europe, Boston Scientific said it expects to begin a limited market launch of the system in 2013 and full market launch in 2014.
According to the statement from Boston Scientific, the agreement calls for an upfront payment of $90 million payable upon transaction closing, and up to an additional $175 million in contingent payments based on regulatory, commercial, and sales-based milestones through 2017. Boston Scientific currently expects the net impact of this transaction on adjusted earnings per share to be immaterial for years 2013 and 2014 and break-even to accretive thereafter, and more dilutive on a GAAP basis as a result of acquisition-related net charges and amortization, which will be determined during the fourth quarter.