Boston Scientific Corporation (NYSE: BSX) today announced the signing of a definitive merger agreement, under which Boston Scientific will acquire Asthmatx, Inc., a privately held company in Sunnyvale, California. Asthmatx designs, manufactures and markets a less-invasive, catheter-based bronchial thermoplasty procedure for the treatment of severe persistent asthma in the 6 to 8 million patients 18 years and older worldwide whose asthma is not well controlled with drugs (inhaled medications). The agreement calls for an upfront payment of $193.5 million and additional payments of up to $250 million contingent upon achievement of specified revenue-based criteria through 2019. The upfront payment is expected to be funded with cash on hand. Boston Scientific expects the transaction to be approximately two cents dilutive to GAAP earnings per share (EPS) in each of 2011 and 2012 (inclusive of approximately one cent per share of amortization expense), break-even in 2013 and accretive thereafter. Closing of the transaction is subject to customary conditions and is expected to be completed in the fourth quarter.
Asthmatx markets the Alair® Bronchial Thermoplasty System, which received U.S. Food and Drug Administration (FDA) approval in April of this year. Bronchial thermoplasty is a less-invasive procedure routinely performed under conscious sedation with patients typically returning home the same day. The Alair System delivers thermal energy to the airway wall in a precisely controlled manner to reduce excessive airway smooth muscle. The procedure is designed to decrease the ability of the airways to constrict, thereby reducing the frequency and severity of asthma attacks. Clinical data show bronchial thermoplasty is safe and effective in the management of severe asthma. Bronchial thermoplasty was named one of the "Top Ten Medical Innovations for 2007" by the Cleveland Clinic Foundation.
"The benefits we have seen with bronchial thermoplasty are impressive and have included a substantial improvement in patients' asthma symptoms," said Mario Castro, M.D., Washington University, St. Louis and Principal Investigator for the pivotal Asthma Intervention Research 2 (AIR2) clinical trial. "Our data demonstrated clinically meaningful improvements in key outcomes including a reduction in severe asthma exacerbations, a reduction in emergency room visits and a trend toward decreased hospitalizations for asthma. Treated patients missed less time from work, school and other daily activities because of their asthma, and they experienced an overall improvement in their quality of life."
"Boston Scientific's acquisition of Asthmatx demonstrates our commitment to providing the most advanced technology solutions to interventional pulmonologists and their patients," said Michael Phalen, President of Boston Scientific's Endoscopy Division. "This first-of-its-kind interventional treatment option for adult patients with severe asthma is a significant medical advance with the potential of substantially reducing medical costs, as demonstrated by an 84 percent reduction in emergency room visits in the AIR2 trial."
"The acquisition of Asthmatx represents an important step in the execution of our strategy to realign Boston Scientific's portfolio," said Ray Elliott, President and Chief Executive Officer of Boston Scientific. "Given the large underserved patient population and this innovative technology, we expect this transaction to provide meaningful revenue growth in the midterm. We will continue to pursue additional Priority Growth Initiatives to strengthen our Company by buying or building products we understand, to be sold through sales forces we already have."
"By combining our two great organizations we will be able to increase awareness of this novel technology and expand our reach to patients suffering the effects of severe asthma," said Glen French, Chief Executive Officer of Asthmatx. "We will be able to leverage Boston Scientific's sales and marketing expertise to introduce the Alair System to a growing number of physicians and provide much needed relief to many patients affected by this debilitating disease."
In addition to FDA approval, the Alair System has received CE Mark.
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