Medical device maker Boston Scientific Corp. has agreed to pay up to $600 million to buy a company whose SpaceOAR hydrogel product has been shown to reduce complications in men who get radiation treatments for prostate cancer.
Massachusetts-based Augmenix will receive $500 million in upfront cash and another $100 million in future milestone payments through the deal.
Boston Scientific has been ramping up investments in men's health in recent years, including more $2 billion worth of acquisitions for Maple Grove's NxThera and the prostate division of the former American Medical Systems in Minnetonka since 2015.
Boston Scientific, also based in Massachusetts, is projecting fast growth for Augmenix's SpaceOAR hydrogel product, which is used in the sizable market for prostate cancer therapy.
With about 400,000 men receiving radiation treatments for prostate cancer every year, Boston Scientific is projecting the $50 million in estimated sales of SpaceOAR hydrogel this year will grow to $90 million next year. The treatment may someday also be applicable for gynecological- and pancreatic-cancer treatments as well.
Prostate cancer is often treated with radiation, but the therapy can create pain and lingering rectal problems because the rectum is physically so close to the prostate. The SpaceOAR therapy involves injecting an absorbable gel into the body to create space between the rectum and the prostate that lasts for six months.
A news release about the deal said clinical trials for gel therapy found that it significantly reduced the amount of radiation delivered to the rectum, and the associated pain. For example, there was zero incidence of grade-2 rectal toxicity for patients in the experimental arm, vs. a 5.7 percent rate for patients who didn't have a gel injection.
The deal to acquire 140-employee Augmenix is expected to close before the end of the year. The transaction is expected to be immaterial to Boston Scientific's adjusted earnings through next year and then become profitable on an adjusted basis thereafter.
