Edwards strikes $690M deal to buy Valtech Cardio

Valtech has agreed terms with Edwards 11 months after it was abandoned by HeartWare.

Edwards Lifesciences has penned a deal to buy Valtech Cardio for up to $690 million, less than the heart valve company looked set to be acquired for last year. The new agreement will see Edwards pay $340 million in stock and cash upfront and up to $350 million in milestones to acquire Valtech and its system for transcatheter repair of the mitral and tricuspid valves.

HeartWare agreed to buy Valtech for approximately $900 million last year, only to pull out of the deal in January following pressure from activist investors. That put Valtech back in play. And the Israeli cardiology implant maker hasn’t had to wait long for another suitor to agree terms.

“We saw an important opportunity to incorporate Valtech's technologies into our comprehensive heart valve repair and replacement portfolio," Edwards CEO Michael Mussallem said in a statement. "We recognize that physicians will likely need a toolbox of options to treat their patients most effectively.” Mussallem sees the pairing of Valtech's Cardioband and Edwards’ own programs giving the company such a toolbox.

If the deal is completed as expected next year, Edwards will pay $340 million in cash and stock upfront. Edwards is also on the hook for up to $350 million in milestones. HeartWare agreed to pay a slightly larger upfront fee and more in milestones to buy Valtech. But that deal was mainly made up of stock, which created difficulties when the value of HeartWare shares cratered in the months after the agreement is disclosed.

Edwards and HeartWare were both attracted to the potential of Cardioband. The CE-marked device enables the reconstruction of the mitral valve without performing open-heart surgery. Valtech is running trials of a similar device to reduce tricuspid regurgitation ahead of a planned CE Mark filing. Neither system has won FDA approval.

Responsibility for expanding the use of Cardioband will fall on Edwards following completion of the deal, but the Irvine, CA-based medtech giant has opted against taking over development of Valtech’s transseptal mitral valve replacement technology. Valtech will spin that early-stage program off before the Edwards’ takeover is completed. Edwards has retained an option to buy the program at a later date.