Boston Scientific has struck a $406 million deal to buy NxThera and its treatment for benign prostatic hyperplasia (BPH). The takeover will bolster Boston Scientific’s urology business through the addition of a minimally invasive, radiofrequency-based way of destroying obstructive prostate tissue.
NxThera secured FDA approval for the device, Rezūm, in 2015 and went on to reel in $40 million from Boston Scientific and others to market the product. That gave Boston Scientific a front-row seat on the progress NxThera has made in persuading payers to cover its device, which works by delivering steam to the tissue that causes BPH. When the steam turns back into water, it releases energy that kills the cells, clearing the blockage that characterizes BPH and affects urination.
Boston Scientific is paying $306 million upfront in cash and committing up to $100 million more in milestones over the next four years to acquire NxThera. Those figures cover 100% of the company. Once the portion of NxThera already owned by Boston Scientific is removed from the equation, the figures fall to around $240 million and $85 million.
NxThera raised just north of $100 million across five rounds during its decade as an independent firm, suggesting investors will receive a tidy return on their outlays. CEO Bob Paulson thinks the deal makes sense for NxThera from a business perspective, too.
“[Boston Scientific] can help expand access at a much more rapid pace than we can, just because they are a large company,” the NxThera CEO told the Star Tribune. “This is a global health condition that affects men everywhere. We’ve only begun to scratch the surface … outside the U.S. In many other countries, the only options are drugs or surgery.”
What, if any, role Paulson and the rest of the NxThera team play in realizing the potential of Rezūm is unclear. Some of the staff will likely be involved in a startup that is spinning out of NxThera to take a prostate cancer device to market, the Minneapolis/St. Paul Business Journal reports. But the only name definitely attached to that new venture is NxThera co-founder Michael Hoey, who will take on the role of CTO.