Boston Scientific to acquire Cameron Health for initial US$300m

8 March 2012

Boston Scientific Corporation (NYSE: BSX) announces the exercise of its option to acquire California-based Cameron Health, Inc. Developer of a subcutaneous implantable cardioverter defibrillator — the S-ICD System.

Unlike conventional implantable cardioverter defibrillators (ICDs), which require thin, insulated wires (leads) to pass through the venous system and into the heart, the entire S-ICD System sits just below the skin and leaves the heart and blood vessels untouched.

The technology has the potential to expand the reach of ICD therapy, offering physicians and appropriate patients a new alternative to traditional ICDs, while strengthening Boston Scientific's arrhythmia management portfolio.

Regulatory approval

The S-ICD System has received CE Mark and has been commercially available in several major European countries since 2009. The system has been clinically evaluated in a variety of studies and has been implanted in more than 1,000 patients worldwide. US FDA approval has been applied for and is expected in the first half of 2013.

Advantages of the acquisition

 Hank Kucheman, Chief Executive Officer of Boston Scientific, said: "The acquisition of Cameron Health builds on Boston Scientific's commitment to introducing innovation in the CRM space and represents an important part of our strategy to generate top-line revenue and market share growth. We believe that the S-ICD System represents a breakthrough treatment for patients at risk of sudden cardiac arrest and strengthens our ability to deliver value to physicians, their patients and healthcare systems around the world.

"We expect that the S-ICD System, combined with recent ICD and CRT-D launches, upcoming pacemaker launches, and the recently acquired WATCHMAN left atrial appendage closure device, will create a compelling and highly differentiated portfolio of arrhythmia management products," continued Kucheman.

A unique technology

"The S-ICD System represents a new category of rhythm management devices that is unlike anything available today," said Kenneth A. Ellenbogen, M.D., F.A.C.C., Professor of Medicine and Director of the Electrophysiology Laboratory at the Medical College of Virginia. "This system provides physicians with a new alternative in the treatment of patients at risk for sudden cardiac arrest and should become first-line therapy for patients who may benefit from not having a lead in the heart."

"The S-ICD System was designed to eliminate the complications associated with transvenous leads, creating an important new treatment option for patients at risk of sudden cardiac arrest," said Kevin Hykes, President and CEO of Cameron Health. "We look forward to joining the Boston Scientific team, which will allow us to expand our commercialization efforts and bring this proven therapy to more patients around the world."

Financial terms

The agreement calls for an upfront payment of $150 million, payable upon transaction closing, an additional potential $150 million payment upon FDA approval of the S-ICD System, plus up to an additional $1.050 billion of potential payments upon achievement of specified revenue-based milestones over a six-year period following FDA approval.

The Company expects to fund these payments through the cash flow of its business. The Company currently expects the transaction to be approximately $0.01 dilutive in 2012 and approximately break-even in 2013 to earnings per share on an adjusted basis and more dilutive in both years on a GAAP basis as a result of acquisition-related net charges and amortization, which will be determined following closing of the transaction. Closing of the transaction is subject to customary conditions, including relevant antitrust clearance, and is expected to occur in the second or third quarter of 2012.

The S-ICD System is restricted under US Federal law for investigational use only and is not for sale in the US.

Source: Boston Scientific