ST JUDE MEDICAL INC St. Jude Medical, Inc. (NYSE: STJ), a global medical device company, today announced that it has signed a definitive agreement to acquire privately held NeuroTherm, Inc., a manufacturer of interventional pain management therapies, for approximately $200 million in cash.
NeuroTherm is a global leader in the treatment of spinal pain using radiofrequency ablation (RFA), a segment of the chronic pain market in which St. Jude Medical does not currently participate. The company expects to complete this transaction by the end of the third quarter, subject to customary closing conditions. NeuroTherm is expected to add approximately $10 million to $15 million to St. Jude Medical’s 2014 sales. Excluding acquisition-related expenses, this transaction will be neutral to St. Jude Medical’s consolidated earnings per share in 2014 and accretive thereafter on a GAAP basis.
“NeuroTherm’s radiofrequency ablation products are an ideal complement to St. Jude Medical’s chronic pain portfolio, providing our global sales force with additional interventional pain therapies that offer potential relief to patients earlier in the chronic pain continuum,” said Michael T. Rousseau, chief operating officer of St. Jude Medical. “As the only medical device manufacturer with both RFA and spinal cord stimulation, this acquisition will enable us to offer more treatment options to patients worldwide who suffer from the debilitating effects of chronic pain.”
Chronic pain affects approximately 1.5 billion people worldwide — more than heart disease, cancer and diabetes combined. The burden of chronic pain carries an economic price tag of $300 billion annually in the U.S. and costs €300 billion to European health care systems. In 2013, there were 230 million Americans diagnosed with acute and chronic pain; only about 8 percent of these patients received interventional therapy.
RFA is a minimally invasive procedure that is designed to reduce back pain by interrupting the nerve supply from painful facet joints in the neck or back. RFA involves the pinpoint application of heat to destroy the painful nerve or nerves. The treatment has been used for over 25 years and provides interventional pain therapy to patients earlier in the chronic pain continuum, often prior to neurostimulation or surgical intervention.
NeuroTherm’s flagship technology is a multi-lesion RF generator that allows real-time temperature monitoring and enables continuous delivery of energy to each site designed to ensure complete treatment of each targeted spinal nerve. The company’s products are available in over 65 countries.
Christopher R. von Jako, Ph.D., president and chief executive officer of NeuroTherm said, “St. Jude Medical’s global leadership in chronic pain represents an excellent opportunity to bring NeuroTherm’s RF ablation technologies to more pain specialists and patients. We are proud of the business that NeuroTherm has built and thank our employees and shareholders for their commitment to developing innovative interventional pain management therapies. We see a promising future with St. Jude Medical that combines our products with a leading pain franchise and further develops the underpenetrated global market for chronic pain.”
BofA Merrill Lynch is serving as financial advisor and Gibson, Dunn & Crutcher LLP as legal counsel to St. Jude Medical. Piper Jaffray & Co. is acting as financial advisor and Calfee, Halter & Griswold LLP is serving as legal counsel to NeuroTherm.
About NeuroTherm
NeuroTherm is a privately held, leading medical device company that develops, manufactures, and markets solutions for chronic pain. The company is focused on delivering minimally invasive solutions and superior service to its customers in order to realize their shared vision of improving the lives of patients suffering from chronic pain. The company offers proprietary solutions including radiofrequency ablation systems, intradiscal catheters, and a full suite of vertebral augmentation products. The U.S. Patent and Trademark Office has approved over forty NeuroTherm patents including five core radiofrequency technology platform patents, and over twenty additional ancillary patents are currently pending. NeuroTherm’s products are available in more than 65 countries with facilities in the metro-Boston area, Amsterdam, Dusseldorf, and London. For more information, please visit www.neurotherm.com.
About St. Jude Medical
St. Jude Medical is a global medical device manufacturer dedicated to transforming the treatment of some of the world’s most expensive epidemic diseases. The company does this by developing cost-effective medical technologies that save and improve lives of patients around the world. Headquartered in St. Paul, Minn., St. Jude Medical has four major clinical focus areas that include cardiac rhythm management, atrial fibrillation, cardiovascular and neuromodulation. For more information, please visit sjm.com or follow us on Twitter @SJM_Media.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements include the expectations, plans and prospects for the Company, including potential clinical successes, anticipated regulatory approvals and future product launches, and projected revenues, margins, earnings and market shares. The statements made by the Company are based upon management’s current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include market conditions and other factors beyond the Company’s control and the risk factors and other cautionary statements described in the Company’s filings with the SEC, including those described in the Risk Factors and Cautionary Statements sections of the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2013 and Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2014. The Company does not intend to update these statements and undertakes no duty to any person to provide any such update under any circumstance.
