When Hillrom arranged to buy Bardy Diagnostics for $375m up front in January it believed that Bardy’s extended cardiac-monitoring technology would be reimbursed by Medicare in the range of $250. 10 days after the deal was announced, however, the Medicare contractor Novitas cut the reimbursement rate for the four codes covering Bardy’s devices to $40-80. Having taken some time to evaluate the likely consequences of this, Hillrom yesterday concluded that it constituted a material adverse effect; it is not clear whether Hillrom intends to renegotiate terms or call the deal off completely, but Bardy has filed a complaint in Delaware’s Chancery Court so it seems that litigation will be part of the puzzle. Cardiac monitoring has recently been a hot area for deal making, with Philips buying Biotelemetry for $2.8bn in December and Boston Scientific acquiring Preventice for $925m a month later. Biotelemetry and Preventice offer similar heart monitors, and Evaluate Vantage understands that they too will be affected by this pricing change, though to a lesser extent thanks to their more diverse product ranges. The Hillrom-Bardy deal is the eighth-largest medtech acquisition announced so far in 2021.
| Top 10 medtech M&A announced in 2021 | ||||
|---|---|---|---|---|
| Date | Acquirer | Target | Value ($m) | Focus |
| Jan 12 | Steris | Cantel Medical | 4,600 | Sterilisation |
| Jan 21 | Boston Scientific | Preventice Solutions | 1,225 | Cardiology - remote heart monitoring |
| Jan 4 | Dentsply Sirona | Byte | 1,040 | Dental - clear aligners |
| Jan 19 | Philips | Capsule Technologies | 635 | Healthcare IT |
| Feb 2 | Veracyte | Decipher Biosciences | 600 | In vitro diagnostics - cancer |
| Jan 7 | Perkinelmer | Oxford Immunotec | 591 | In vitro diagnostics - infection |
| Jan 19 | Thermo Fisher Scientific | Mesa Biotech | 550 | In vitro diagnostics - infection |
| Jan 20 | Haemonetics | Cardiva Medical | 510 | Cardiology - vascular closure |
| Jan 15 | Hillrom | Bardy Diagnostics | 375 | Cardiology - remote heart monitoring |
| Source: EvaluateMedTech. https://www.evaluate.com/vantage/articles/news/snippets/medicare-changes-imperil-hillrom-bardy-deal | ||||
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