Medtronic buys Sapiens SBS for $200M

Medtronic Inc. said Tuesday that it is paying $200 million in cash for a Dutch company that is working on a next-generation deep-brain stimulation device for patients with neurodegenerative diseases.

When standard drug therapies for Parkinson's disease and other conditions stop working, some advanced-stage patients get devices to deliver tiny electric shocks directly to their brains to lessen symptoms of loss of body movement control.

The approach is called deep-brain stimulation therapy (DBS), and it has been approved by the FDA for more than a decade. Medtronic has the only U.S.-approved devices on the market today, though Boston Scientific and St. Jude Medical have similar devices in their pipelines.

Medtronic's acquisition of the privately held Dutch firm Sapiens Steering Brain Stimulation is a move toward its next DBS device. Sapiens is finalizing development of a new device that executives say could potentially offer more precise treatment by using a 40-point electric stimulation system to interact with the brain. Medtronic's three U.S.-approved device leads use just four electrodes.

Lothar Krinke, vice president and general manager of the Fridley-based company's brain-modulation business, said the Sapiens device could allow more-individualized treatment options and cut down on side effects from existing U.S.-approved devices, including speech and swallowing disorders, muscle spasms and sensory disturbances. The new device could also cut procedure time.

"This acquisition may allow us to bring this technology to the market faster," Krinke said in an e-mail response to questions.

Sapiens will also serve as a future research-and-development hub for DBS technologies, in addition to Medtronic's existing operations in neuromodulation.

Medtronic's neuromodulation division, which includes DBS and devices for chronic pain and urologic disorders, made up just 11 percent of the company's $17 billion in revenue for the fiscal year that ended April 27. The Sapiens acquisition is not expected to affect Medtronic's 2015 earnings expectations.

DBS has been an area of significant interest among the big device makers.

In June, Boston Scientific unveiled results from a multi-center randomized double-blind clinical trial of 40 European patients with Parkinson's that found its Vercise DBS system produced 62 percent improvement in motor function 12 months after implant.

The company, which employs several thousand people in Minnesota, began enrolling U.S. patients in an investigational clinical trial of Vercise in 2013. A spokesman said it's not clear when the device might be submitted to the FDA for U.S. approval.

Little Canada-based St. Jude has had approval since 2009 to sell several DBS devices in Europe and other countries to treat Parkinson's, but the company hasn't announced plans to try to gain U.S.-approval.