St. Jude Medical Announces Definitive Agreement to Acquire NeuroTherm
Acquisition expected to accelerate growth of St. Jude Medical’s chronic pain
business and strengthen its position as a global leader in developing
therapies to treat chronic pain
ST. PAUL, Minn. & WILMINGTON, Mass. -- July 14, 2014
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.
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.
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.
St. Jude Medical, Inc.
J.C. Weigelt, 651-756-4347
Micki Sievwright, 651-756-4615
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