Medtronic completes initial closing in $50M purchase of Acutus' left-heart access devices

Medtronic is now the proud owner of a handful of left-heart access devices, designed to help surgeons make the journey from the right atrium of the heart to the left in procedures for left-atrial appendage closure, mitral valve repair, atrial fibrillation ablation and more.

The new additions came as Medtronic completed on Thursday the initial closing in its buyout deal with Acutus Medical, the companies announced Friday.

The first of the deal’s two planned closings comprised a $50 million upfront payout from Medtronic. In return, Acutus handed over the intellectual property rights to its entire portfolio of left-heart access devices, plus some of the equipment needed to manufacture the devices.

That portfolio includes the AcQCross Qx system, which recently earned an expanded indication from the FDA, announced by Acutus just this week. The device combines the needle and vessel dilator needed to puncture a hole through the septum between the left and right atrium, and it can now be used to implant a wider range of left-atrial appendage closure devices.

The remainder of the transaction could earn Acutus up to $37 million more from Medtronic in milestone payments as its devices hit certain manufacturing and regulatory goals. The company may receive even more payouts—of undisclosed amounts—as its technology achieves predetermined revenue goals throughout the next four years.

Those milestones will also determine the point at which Acutus stops commercializing the devices itself and instead becomes a supplier solely to Medtronic. Meanwhile, its own remaining portfolio will center on a heart-mapping software platform that provides a 3D image of the heart to guide Afib ablation treatments.

Alongside securing its upfront payment of $50 million from Medtronic, Acutus also marked its entry into a new credit facility to refinance its existing debt. The new loan from Deerfield Management Company totals $35 million in aggregate principal, with payments due beginning in three years.

“We continue to advance our strategic initiatives to drive adoption of our differentiated mapping and therapy platform as well as improve our financial and operational performance,” said David Roman, currently the interim CEO and CFO of Acutus. “The first closing of the sale of our left-heart access portfolio as well as the refinancing of our debt structurally transforms the company’s financial position and enables us to further invest in critical product and market development programs.”

The Medtronic deal and debt refinancing mark the latest steps in an effort Acutus began earlier this year to drastically cut its operating costs. In January, the San Diego-area company outlined plans for a corporate restructuring that would include layoffs, a narrowed product development slate and other cost reduction measures.

Those initiatives came as Acutus reported operating expenses of $96.5 million for all of 2021—more than five times greater than its $17.3 million in revenue, leading to a gross margin of negative 91% for the year and a net loss of $117.7 million.