Despite multiple product issues recently, and a two-year restructuring plan, Boston Scientific is determined to improve its standing in the medical device industry. Its latest move, purchasing Sunnyvale, CA-based Asthmatx for $443.5 million, has analysts talking, both with optimism and skepticism. "I like where this is going, Boston Scientific," Brian Orelli of The Motley Fool says. "I'm just not sure whether we can call it a turning point quite yet."
Asthmatx's signature product, the Alair Bronchial Thermoplasty System, received FDA approval. It assists asthmatics by inserting a catheter into the airway, removing some of the muscle that contracts during asthma attacks. However, the procedure is still relatively new, and is usually attempted after exhausting all of the patient's pharmaceutical options. That fact is keeping Orelli from dancing in the streets. Nevertheless, the companies are remaining positive.
"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, CEO of Asthmatx, in a release. "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."
Only $193.5 million of the $443.5 million deal is guaranteed and paid upfront. The rest is contingent upon revenue milestones through 2019.