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Boston Scientific (BSX) Inks New Deal to Buy Baylis Medical

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Boston Scientific Corporation (BSX - Free Report) recently entered into a definitive agreement to acquire Baylis Medical Company Inc. for an upfront payment of $1.75 billion, subject to closing adjustments. The acquisition will add the radiofrequency (RF) NRG and VersaCross Transseptal Platforms as well as a range of guidewires, sheaths and dilators to Boston Scientific’s electrophysiology and structural heart product portfolios.

These platforms feature advanced transseptal puncture and have been clinically proven to improve safety, efficacy and efficiency while crossing the atrial septum to deliver therapies such as atrial fibrillation ablation, left atrial appendage closure (LAAC) and mitral valve interventions in the left side of the heart.

The recent acquisition of Baylis Medical is likely to bolster Boston Scientific’s electrophysiology and structural heart product offerings.

Strategic Significance of the Buyout

Baylis Medical’s platforms utilize RF energy method to provide predictable and safe transseptal access instead of solely relying on mechanical force. The novel VersaCross platform further offers similar benefits to streamline transseptal crossing procedures and therapy delivery while eliminating potential wire and sheath exchanges to reduce risks during procedures.

Baylis Medical gained FDA 510(k) clearance for the NRG platform in 2008. Since then, the technology has been utilized in more than one million procedures. Meanwhile, the company’s VersaCross platform gained FDA 510(k) clearance in 2020. These platforms are complemented by the Baylis Medical’s family of guidewires, sheaths and dilators, which are intended for use in left-sided diagnostic, ablation, mitral and LAAC procedures.

Per Boston Scientific management, in addition to complementing the current offerings within the electrophysiology and structural heart portfolios, Baylis Medical is expected to provide significant revenues, operating income, and new research and development capabilities across the company’s multiple businesses.

Financial Significance

The acquisition deal is expected to close in the first quarter of 2022, subject to fulfillment of customary closing conditions. This transaction is anticipated to be accretive to adjusted earnings per share by approximately 1 cent in 2022 and increasingly accretive thereafter.

Due to amortization expense and acquisition-related net charges, the transaction, on a GAAP basis, is estimated to be less accretive or dilutive, as the case may be, in 2022 and less dilutive or increasingly accretive afterward, as the case may be.

Industry Prospects

Per a report published in Persistence Market Research, the transseptal access systems market is set to witness a CAGR of 9.4% through 2031. Factors such as the increasing prevalence of atrial fibrillation in developing and developed countries, the surge in geriatric population with high-risk conditions such as hypertension, growing awareness among individuals, and advancements in healthcare infrastructure in emerging markets are expected to drive the market.

Given the market prospects, the Baylis Medical buyout seems strategic and well-timed for Boston Scientific.

Other Developments by Boston Scientific

In September 2021, Boston Scientific announced an agreement to acquire Devoro Medical, Inc. Devoro Medical is the renowned developer of the WOLF Thrombectomy Platform, intended to target and remove clots without damaging blood vessels and reducing blood loss. This platform is a compelling new alternative for physicians performing thrombectomy procedures.

In the same month, the company closed the acquisition of the global surgical business of Lumenis LTD. from an affiliate of Baring Private Equity Asia. The Lumenis surgical business consists of premier laser systems, fibers and accessories intended for urology and otolaryngology procedures. This buyout is expected to add the Lumenis laser portfolio to Boston Scientific’s category-leading kidney stone management and benign prostatic hyperplasia offerings.

Competitive Niche

The structural heart market is competitive with the presence of prominent MedTech players.

In this regard, Abbott Laboratories (ABT - Free Report) recently gained FDA approval for its Epic Plus and Epic Plus Supra Stented Tissue Valves to enhance treatment options for aortic or mitral valve disease patients. These devices are the latest advancements in the company’s Epic surgical valve platform, and they include innovations that make valve implantation and future cardiac interventions easier.

Medtronic plc (MDT - Free Report) announced the receipt of FDA approval for its latest-generation, self-expanding transcatheter aortic valve replacement (TAVR) system. The Evolut FX TAVR system is designed to enhance ease of use and provide greater precision and control throughout the procedure. This system maintains the industry-leading hemodynamic and durability benefits of the Evolut TAVR platform while bringing product and procedure innovation for patients with symptomatic severe aortic stenosis.

Edwards Lifesciences Corporation (EW - Free Report) has been progressing well in the structural heart space with increased adoption of the RESILIA technologies worldwide. During its earnings call for second-quarter 2021, the company noted significant year-over-year adoption of Edwards RESILIA tissue valves, including the INSPIRIS RESILIA aortic surgical valve, the KONECT RESILIA aortic tissue valve conduit and the newly launched MITRIS RESILIA surgical mitral valve.