Volcano grabs ArtheroMed for up to $130M

ArtheroMed's Phoenix atherectomy catheter--Courtesy of ArtheroMed

Cardiovascular device maker Volcano ($VOLC) grabbed ArtheroMed for up to $130 million, gaining access to the company's FDA-approved atherectomy system to treat peripheral artery disease.

Under the terms of the acquisition, Volcano will pay $115 million in cash at closing and will make a $15 million milestone payment if a pending application for one of ArtheroMed's Phoenix atherectomy devices wins FDA clearance by Nov. 15, 2014. The company will also continue to make revenue-based milestone payments to ArtheroMed as part of the agreement.

ArtheroMed's Phoenix system includes a low-profile catheter that continuously removes disease material as it is debulked, restoring blood flow to the ankle and foot. The Menlo Park, CA-based company already secured a CE mark for its device and won 510(k) clearance for Phoenix in January.

Through the deal, Volcano hopes to cash in on a growing market and expand its current line of products. The global atherectomy market is estimated at $350 million to $400 million and is growing at least 7% annually, the company said in a statement. The transaction helps the San Diego, CA-based company diversify its product portfolio and provide a broader range of therapeutic devices moving forward.

"We believe the potential of Phoenix to both grow the atherectomy market and achieve a strong market share position will facilitate our revenue, gross margin and operating income expansion goals," CEO Scott Huennekens said in a statement.

Volcano is not the only company looking to beef up its product offerings for peripheral artery disease. Earlier this month, Boston Scientific ($BSX) shelled out $415 million for Bayer AG's device unit, adding the company's JetStream Aterectomy System to its portfolio. In February, med tech giant Medtronic ($MDT) launched a new crossing catheter in Europe that helps improve blood flow through below-the-knee vessel beds. With its acquisition of ArtheroMed, Volcano could compete with bigger names on the block.

The company plans to launch a limited market release of Phoenix by the end of 2014, and a full market release in early 2014. Volcano will continue to manufacture the device at ArtheroMed's California facility, but will transition manufacturing to its own facility in Costa Rica by the end of next year, the company said in a statement.

- read the release

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