Boston Scientific Corporation (NYSE: BSX) today announced a definitive agreement to acquire Cryterion Medical, Inc., a privately-held company developing a single-shot cryoablation platform for the treatment of atrial fibrillation (AF). The addition of this cryoballoon platform positions the company as the first to have both cryothermal and radiofrequency (RF) single-shot, balloon-based ablation therapies in its portfolio. Boston Scientific has been an investor in Cryterion since its inception in 2016 and the transaction price for the approximately 65 percent remaining stake not already owned by Boston Scientific consists of $202 million in up-front cash.
The quickly expanding global electrophysiology (EP) market is estimated to reach $5 billion in 2018. Additionally, single-shot ablation therapies are believed to be the fastest growing sub-segment within the EP market, with rates well into in the double digits, and trending toward more than $1 billion over the next few years.
Patients with AF – a common heart rhythm disorder – are often treated with anti-arrhythmic drugs as well as cardiac ablation. Ablation therapy is the process of delivering RF (heating) or cryothermal (cooling) energy to the areas of the heart muscle responsible for the abnormal heart rhythm. Both types of energy can be used to isolate pulmonary veins, which are often the source of AF.
The Cryterion Medical cryoablation platform uses cryothermal energy to interrupt the irregular electrical signals that can cause AF. Developed with a next-generation balloon catheter, advanced mapping catheter, steerable sheath and enhanced console, the system is designed to streamline overall procedural workflow, enhance maneuverability and improve positioning in challenging anatomy.
“Initial clinical study results demonstrate that our system has a promising safety profile as well as acute efficacy,” said Keegan Harper, president and chief executive officer, Cryterion Medical, Inc. “We look forward to bringing this advanced cryoablation system to market with the support of Boston Scientific.”
Performance of the cryoablation system from Cryterion Medical is being investigated in a clinical study in Europe. Clinical evidence from this study will be included in a regulatory submission for CE Mark, expected in early 2019. The company will also pursue regulatory approval in the U.S. and plans to submit an investigational device exemption (IDE) application to the U.S. Food and Drug Administration, with patient enrollment expected to begin in 2019.
“The acquisition of Cryterion Medical enhances our AF ablation procedure offerings, allowing physicians to select a therapeutic option based on clinical preference and specific patient needs,” said Kenneth Stein, M.D., senior vice president and chief medical officer, Rhythm Management and Global Health Policy, Boston Scientific. “We are committed to providing physicians with a comprehensive suite of therapies that lead the way for clinical advancements and address the needs of the increasing population of patients with AF.”
Boston Scientific expects the transaction to be immaterial on an adjusted earnings per share basis through 2020, and accretive thereafter. On a GAAP basis for 2019 and subsequent years, the transaction is expected to be less accretive, or more dilutive as the case may be, due to amortization expense and acquisition-related net charges. For 2018 on a GAAP basis, the transaction is expected to be accretive due to a one-time gain on prior investment.
