|Boston Scientific CEO Mike Mahoney|
As Boston Scientific ($BSX) hunts for balms to nurse its flagging revenue, the company has agreed to fork over $275 million for rival C.R. Bard's ($BCR) electrophysiology business, a move the company said will up its share of a fast-growing market.
Under the deal, expected to close this year, Boston Scientific will pick up Bard's line of cardiac catheter ablation devices, recording systems and mapping tools, a business that pulled in $111 million in sales last year. The global market for electrophysiology sits at about $2.5 billion, Boston Scientific said, and it's growing about 10% each year.
In October, Boston Scientific snatched up Rhythmia Medical for $90 million up front and up to $175 million in milestones, marking the company's first foray into electrophysiology and giving it new treatments for atrial fibrillation and atrial flutter. Now, by adding Bard's line of successful therapies and roughly 180 employees, Boston Scientific is poised to capitalize on demand for new heart treatments, CEO Mike Mahoney said.
"We believe the innovation and global reach that Bard EP delivers will meaningfully advance our position in this fast-growing market, enabling us to more effectively serve the needs of patients who suffer from cardiac arrhythmias," Mahoney said in a statement.
And a meaningful advance is just what the company needs. Last quarter, Boston Scientific took a $354 million loss as revenues continued to slide. Rhythm management devices, the company's second-largest segment, slipped 12%, and the company's $35 million in electrophysiology sales did little to help its struggling ICDs and pacemakers.
But Mahoney has long said he sees a way forward, driven by continued cost cuts and some big bets on new technology. Boston Scientific is counting on its stroke-preventing Watchman device to pick up FDA approval and contribute to sales, and the company bought into the renal denervation game for $425 million last year, angling for a slice of what's predicted to be a multi-billion-dollar market.
Now, with Bard's electrophysiology heft on the way, the company will grow its footprint in one of the only cardiac device sectors predicted to grow.
- read the announcement