St. Jude Medical ($STJ) snatched up Nanostim for at least $123.5 million, giving it bragging rights as the owner of the only leadless cardiac pacemaker to hit the market so far.
The deal puts St. Jude well ahead of rivals Medtronic ($MDT) and Boston Scientific ($BSX), who are trying to catch up with similar products.
Minnesota-based St. Jude first began courting Nanostim two years ago as an investor and has always had an option to buy the California company. St. Jude helped Nanostim develop its technology and navigate regulatory approval processes on two continents. Nanostim's leadless pacemaker, about as big as a AAA battery and less than 10% the size of a regular pacemaker, just obtained a CE mark approval. Things are further behind in the U.S. but progressing all the same--the FDA recently granted an investigational device exemption, allowing the launch of a pivotal trial, St. Jude said.
Nanostim is privately funded and has attracted some big-name investors, including InterWest Partners, US Venture Partners, Emergent Medical Partners and Life Science Angels. Beyond the initial acquisition, they'll get more of a payout in the future. St. Jude will pay Nanostim's shareholders up to $65 million over time, assuming certain revenue-based milestones can be met.
Pacemaker sales have become relatively stagnant in the industry. Wireless pacers, which could help reduce complications such as infection and lead failure, could give the sector a big jolt. More than 4 million people globally have an implanted pacemaker, and 700,000 patients face pacemaker implants annually, St. Jude said.
Just in May, Nanostim wowed the Heart Rhythm Society meeting in Denver with data showing that its wireless pacer has been successful in some of its initial trial patients.
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