Boston Scientific Corporation today announced it has acquired Intelect Medical, Inc., a development-stage company located in Boston. Intelect Medical is developing advanced neuromodulation technologies for deep brain stimulation (DBS) therapy. The transaction values Intelect Medical at $78 million with no cash and no debt on its balance sheet. As a result of Boston Scientific's existing equity and debt positions in Intelect Medical, the total cash payment by Boston Scientific was approximately $60 million, which was funded with cash on hand. Boston Scientific expects the transaction to have an immaterial impact on its GAAP and adjusted earnings per share in each of 2011, 2012 and 2013, and to be accretive starting in 2014.
DBS involves the implantation of a lead into the brain and a pulse generator into the chest that sends electrical impulses to the lead. Boston Scientific estimates the current worldwide market for DBS at $400 million with projections to grow to more than $1.5 billion by 2020.
Intelect Medical is developing the GUIDE™ DBS programming system, the first system to enable clinicians to visualize stimulation fields in the brain and provide more precise targeting of therapy. This innovative technology -- combined with Boston Scientific's Vercise™ DBS System -- is expected to provide clinicians substantially improved treatment for their patients. The Vercise DBS System is a neurostimulation device designed to deliver electrical signals to specific areas within the brain through individual lead contacts that allow a more tailored amount of current flow based on patient needs. Boston Scientific recently announced the first Vercise DBS System implant as part of its VANTAGE clinical trial to treat Parkinson's disease. Parkinson's disease is a progressive neurodegenerative disorder that affects 7 to 10 million people worldwide, according to the World Health Organization.
"The acquisition of Intelect Medical supports our long-term strategy of enhancing our product portfolio and gaining market share in the Neuromodulation space, and it will help us to provide the most advanced deep brain stimulation technology solutions for neurologists, neurosurgeons and their patients," said Michael Onuscheck, Senior Vice President and President, Neuromodulation for Boston Scientific. "The GUIDE DBS system promises to be a major advance in deep brain stimulation therapy, especially when used in conjunction with our Vercise DBS System."
"This acquisition represents additional progress in our strategy to realign Boston Scientific's portfolio through the execution of our Priority Growth Initiatives," said Ray Elliott, President and Chief Executive Officer of Boston Scientific. "Deep brain stimulation has enormous potential, and it is an important part of our Neuromodulation business growth plans. 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."
The Vercise DBS System is an investigational device and is limited by applicable law to investigational use only and is not available for sale.
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