By: Gayle S. Putrich
July 28, 2014
The medical merger mania continues this summer as two more medical device manufacturers are swallowed up by bigger competitors.
St. Jude Medical Inc. is acquiring privately held NeuroTherm Inc., for $200 million in cash.
Founded in 2005 and headquartered near Boston in Wilmington, Mass., NeuroTherm specializes in chronic pain management devices, particularly in the treatment of spinal pain using radiofrequency ablation (RFA), a segment of the chronic pain market in which St. Jude Medical currently does not have a foothold.
“NeuroTherm’s radiofrequency ablation products are an ideal complement to St. Jude Medical’s chronic pain portfolio, providing our global sales force with additional interventional pain therapies that offer potential relief to patients earlier in the chronic pain continuum,” said Michael T. Rousseau, chief operating officer of St. Jude Medical, in a news release. “As the only medical device manufacturer with both RFA and spinal cord stimulation, this acquisition will enable us to offer more treatment options to patients worldwide who suffer from the debilitating effects of chronic pain.”
St. Jude Medical expects the acquisition to contribute around $10 million to $15 million in sales for 2014, and add to earnings after 2014. The transaction is scheduled to close by the end of the third quarter this year.
Kalamazoo, Mich.-based device giant Stryker Corp. will get even bigger with the acquisition of Small Bone Innovations (SBi) for $375 million in cash.
Headquartered in Morrisville, Pa., 10-year-old SBi makes combination plastic-and-metal devices used in small-joint procedures, such as fingers and wrists, with the crown jewel in its portfolio being the Scandinavian Total Ankle Replacement (STAR Ankle) system, which is sold in more than 40 countries and accounted for 50 percent of the company’s 2013 sales.
“The addition of the STAR Ankle strengthens our product offering in this fast growing business, and demonstrates our continued commitment to growth in this segment and more broadly in extremities,” said David Floyd, Stryker’s president of orthopedics, in a press release.
Stryker, like much of the medical device world, has been on an acquisition tear lately, acquiring Irvine, Calif.-based Patient Safety Technologies and Sunnyvale, Calif.-based developer of hip arthroscopy products, Pivot Medical Inc. before acquisition of MAKO Surgical and its advanced robotic arm technology known as Robotic Arm Interactive Orthopedic System (RIO) — all in a year that has also already seen orthopedic device giant Zimmer announce a plan to buy cross-town rival Biomet in a $13.35 billion cash and stock deal and the world’s largest stand-alone medical device maker, Medtronic, hatch a plan to save on U.S. taxes with the purchase of Dublin device maker Covidien plc.