En route to Abbott’s acquisition of St. Jude Medical, the duo is agreeing to sell off portions of their vascular and electrophysiology units, worth about $1.12 billion, to Terumo. The transaction is subject to the completion of the Abbott-St. Jude deal.
The all-cash divestiture will see St. Jude offloading its Angio-Seal and Femoseal vascular closure products and Abbott cutting loose its Vado Steerable Sheath, according to a statement. Meanwhile, Abbott will get to hold on to its stable of vascular closure devices, such as the Perclose ProGlide Suture-Mediated Closure System and the StarClose SE Vascular Closure System. The transaction is under review by antitrust authorities.
The deal comes as St. Jude sets up a new cybersecurity medical advisory board after a battery failure issue with some of its cardiac rhythm management devices cropped up last week. Last Tuesday, the company warned of a possible problem with the lithium-based battery used in some of its implantable cardioverter defibrillators and CRT-D devices manufactured before May 23, 2015, and recommended that patients contact their physician immediately.
The battery trouble surfaced after Muddy Waters Research claimed in August that St. Jude would lose close to half of its revenue for about two years due to “serious cybersecurity vulnerabilities” in its cardiac devices. St. Jude has repeatedly refuted the report, asserting that its devices have safeguards in place to ward off such attacks.
After denying rumors last year that it was eyeing a St. Jude acquisition, Abbott changed its tune in April this year, agreeing to pony up $25 billion for the St. Paul, MN-based devicemaker. At the deal’s announcement, it was slated to close in the fourth quarter of this year. But Abbott has also been trying to wriggle out of an agreement to buy diagnostics maker Alere for $5.8 billion, noting concerns about a federal probe into Alere’s international business practices. In August, Alere filed a complaint in Delaware Chancery Court seeking to “compel” Abbott to complete the acquisition.