St. Jude Medical (STJ) Snags Nanostim Inc. for $123.5 Million, CE Mark Approval of World's First Leadless Pacemaker
10/14/2013 6:43:10 AM
St. Jude Medical Announces Acquisition and CE Mark Approval of World's First Leadless Pacemaker
ST. PAUL, Minn.--(BUSINESS WIRE)-- St. Jude Medical, Inc. (STJ), a global medical device company, today announced the completion of its acquisition of Nanostim, Inc., a privately-owned developer of miniaturized, leadless pacemakers. The acquisition adds the world’s first and only leadless pacemaker to the St. Jude Medical product portfolio and culminates a two-year partnership between the two companies during which St. Jude Medical invested in and collaborated with Nanostim throughout its product development and commercialization initiatives.
Unlike conventional pacemakers that require a more invasive surgery, the Nanostim™ leadless pacemaker is designed to be implanted directly into the heart via a minimally invasive procedure. The device is delivered using a steerable catheter through the femoral vein, eliminating the need to surgically create a pocket for the pacemaker and insulated wires (called leads) that have historically been recognized as the most vulnerable component of pacing systems. The Nanostim leadless pacemaker recently received CE Mark approval and will be available soon in select European markets. It also recently received U.S. Food and Drug Administration (FDA) conditional approval for its Investigational Device Exemption (IDE) application and pivotal clinical trial protocol to begin evaluating Nanostim leadless technology in the U.S.
“The Nanostim leadless pacemaker represents one of the most important advances in the history of pacing technology, and builds on St. Jude Medical’s strong history of pacing innovation – beginning with the first implantable pacemaker in 1958 through the introduction of quadripolar cardiac resynchronization therapy pacing,” said Eric S. Fain , M.D., president of the St. Jude Medical Implantable Electronic Systems Division. “We look forward to welcoming Nanostim employees to St. Jude Medical and to continuing our legacy of transforming the treatment of cardiac rhythm disorders with pioneering technology.”
The Nanostim leadless pacemaker is less than 10 percent the size of a conventional pacemaker. The small size of the device and lack of a surgical pocket, coupled with the exclusion of a lead, improves patient comfort and can reduce complications, including device pocket-related infection and lead failure. The elimination of the visible lump and scar at a conventional pacemaker’s implant site, in addition to the removal of patient activity restrictions that may prevent the dislodgement or damage to a conventional lead, will potentially improve the quality of life for patients with this technology by allowing most to continue living active, uninhibited lifestyles. The device is supported by the St. Jude Medical Merlin™ Programmer that is also used to interrogate and program the company’s other pacemakers and implantable cardioverter defibrillators (ICDs).
“For the past 40 years the therapeutic promise of leadless pacing has been discussed, but until now, no one has been able to overcome the technical challenges,” said Dr. Johannes Sperzel of the Kerckhoff Klinik in Bad Nauheim, Germany. “This revolutionary technology offers my patients a safe, minimally-invasive option for pacemaker delivery that eliminates leads and surgical pockets. This is the future of cardiac pacing.”
The Nanostim leadless pacemaker was designed to be fully retrievable so that the device can be readily repositioned during the implant procedure and later retrieved if necessary, such as at the time of normal battery replacement. Initial results from the LEADLESS study, a prospective, single-arm, multicenter study evaluating patients with the Nanostim leadless pacemaker, were presented earlier this year and demonstrated overall device performance comparable to conventional pacemakers. Total implant procedure times averaged 28 minutes. Even with miniaturization, the device battery is expected to have an average lifespan of more than 9 years at 100 percent pacing, or more than 13 years at 50 percent pacing.
Cardiac pacemakers are used to treat bradycardia, which is a heart rate that is too slow. These devices monitor the heart and provide electrical stimulation when the heart beats too slowly for each patient's specific physiological requirements. More than four million people worldwide have an implanted pacemaker or other cardiac rhythm management device, and an additional 700,000 patients receive the devices each year.
On May 3, 2011, St. Jude Medical and Nanostim entered into a series of agreements pursuant to which St. Jude Medical made an investment in, and obtained an exclusive option to acquire, Nanostim. This transaction results from St. Jude Medical’s exercise of its exclusive option under those agreements. Under the terms of a merger agreement entered into between the parties, St. Jude Medical paid $123.5 million to Nanostim shareholders at the closing of the transaction. The merger agreement also provides for additional cash payments of up to $65 million, which are contingent upon both the achievement and timing of certain revenue-based milestones. Except for acquisition-related expenses, this transaction does not impact St. Jude Medical’s outlook for 2013 consolidated earnings per share.
Commenting on the acquisition, Nanostim Chief Executive Officer Drew Hoffman said, “Nanostim’s focus on bringing innovative technologies to the market closely aligns with St. Jude Medical’s commitment to developing leading products and treatment options for patients and physicians worldwide. We are pleased to have recently received CE Mark approval for the Nanostim leadless pacemaker. Nanostim looks forward to now working as part of St. Jude Medical to further advance our commercialization initiatives and expand this technology into new and existing markets.”
In connection with this transaction, BofA Merrill Lynch is acting as financial advisor and Gibson, Dunn & Crutcher LLP as legal advisors to St. Jude Medical. Wilson Sonsini Goodrich & Rosati is acting as legal counsel to Nanostim.
Nanostim, an early-stage medical device start-up company based in Milpitas, Calif., is also backed by InterWest Partners, US Venture Partners, Emergent Medical Partners and Life Science Angels.
About St. Jude Medical
St. Jude Medical is a global medical device manufacturer dedicated to transforming the treatment of some of the world’s most expensive, epidemic diseases. The company does this by developing cost-effective medical technologies that save and improve lives of patients around the world. Headquartered in St. Paul Minn., St. Jude Medical has four major clinical focus areas that include cardiac rhythm management, atrial fibrillation, cardiovascular and neuromodulation. For more information, please visit sjm.com or follow us on Twitter @SJM_Media.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements include the expectations, plans and prospects for the Company, including potential clinical successes, anticipated regulatory approvals and future product launches, and projected revenues, margins, earnings and market shares. The statements made by the Company are based upon management’s current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include market conditions and other factors beyond the Company’s control and the risk factors and other cautionary statements described in the Company’s filings with the SEC, including those described in the Risk Factors and Cautionary Statements sections of the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2012 and Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2013. The Company does not intend to update these statements and undertakes no duty to any person to provide any such update under any circumstance.
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St. Jude Medical, Inc.
J.C. Weigelt, 651-756-4347
Kate Stoltenberg, 651-756-3388
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