Boston Scientific Exercises $325 Million Option to Buy Millipede

4 people moving two cardboard puzzle pieces to fit together

Boston Scientific is exercising its option to buy the remaining shares of Santa Rosa, Calif.-based Millipede. The original deal was entered into in January 2018, when Boston Scientific acquired $90 million shares with the option to buy the remaining $325 million, which the company did yesterday.

A $125 million commercial milestone payment is also part of the deal.

Millipede manufactures the IRIS transcatheter annuloplasty ring to treat mitral valve regurgitation. The company was founded in August 2012 by Steven F. Bolling, a University of Michigan cardiac surgeon. The IRIS is a complete semi-rigid annuloplasty ring designed to replicate the gold standard in valve repair, which is a complete annuloplasty ring. At this time the Iris is investigational, although in May the company announced it had successfully completed its first clinical use of the product in two patients.

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And in July, the company indicated it had continued its implant series, successfully implanting its newest 50-millimeter IRIS annuloplasty ring with a transfemoral, transseptal delivery catheter in a functional mitral regurgitation (FMR) patient. At the time, Randy Lashinski, Millipede’s president and chief executive officer, stated, “We are excited to introduce this newest implant size to allow inclusion of a larger patient population.”

Boston Scientific indicates the transcatheter mitral repair and replacement market will hit $1 billion by 2021, with most of that made up of repair procedures.

“Upon commercialization, we believe the IRIS system can meet the needs of a currently underserved patient population that requires physiological, less invasive options to treat functional mitral regurgitation in patients with progressive heart failure,” stated Ian Meredith, Boston Scientific’s executive vice president and global chief medical officer. “This device is designed to be highly customizable to a specific patient’s mitral anatomy and disease state, and is repositionable and retrievable to promote a high-quality outcome.”

Boston Scientific expects the deal to be dilutive to its earnings per share (EPS) for several years, but said that “all dilutive impact is expected to be absorbed via internal trade-offs.” It expects no net adjusted EPS impact. The deal is expected to close in the first quarter of 2019.

Earlier this month, the company announced that a jury in the U.S. District Court for the District of Delaware landed on its side in a patent lawsuit. The jury determined that the Edwards Lifesciences’ Sapien 3 Aortic Valve infringes its patent #8,992,608, and that Edwards owes Boston Scientific damages through the end of 2016. Additional decisions will be made about damages and interest incurred from 2017 to 2018 in post-trial sessions.

The jury also found that the Boston Scientific LOTUS Aortic Valve System didn’t infringe on three other Edwards’ Spenser patents.

The LOTUS valve is one of two valve systems in Boston Scientific’s structural heart portfolio. It offers the ACURATE neo Aortic Valve System in certain European markets, and is also looking for European approval for its next-generation valve system, the ACURATE neo2, which it expects to commercialize in the first half of 2019.

“We continue to be encouraged by the sustained record of positive legal rulings, first in European courts and now in the U.S., which upholds our company’s intellectual property,” stated Desiree Ralls-Morrison, Boston Scientific’s senior vice president, general counsel and corporate secretary.

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