Boston Scientific’s Securus Medical acquisition
On April 3, 2018, Boston Scientific (BSX) announced the acquisition of Ohio-based Securus Medical for an upfront cash payment of $40 million. The deal also includes commercial milestones and regulatory achievement–based contingent payments of up to $10 million. Boston Scientific, which invested in Securus for the first time in 2016, already has a stake in the company. The specified payments are for the remaining stake in the company not already owned by Boston Scientific. BSX stock gained ~2.1% on April 3, 2018. Peers Abbott Laboratories (ABT), Medtronic (MDT), and Edwards Lifesciences (EW) returned ~1%, ~0.75%, and ~0.65% that day.
The acquisition is expected to be immaterial to the company’s adjusted and GAAP (generally accepted accounting principles) EPS (earnings per share). The Securus acquisition is expected to boost Boston Scientific’s electrophysiology business. The business, which generated sales of ~$278 million in fiscal 2017 and registered YoY (year-over-year) growth of ~14.5%, forms part of the company’s Rhythm Management segment. Boston Scientific generated total sales of $9 billion in fiscal 2017. The chart above briefly details Boston Scientific’s electrophysiology business, growth potential, and market position.
Securus Medical: Company overview
Securus Medical is an Ohio-headquartered, privately held company with offices in Beverly, Massachusetts. It has developed a thermal monitoring system for esophageal temperature measurement on a continuous basis. The system ensures that heart tissue triggering arrhythmia is not damaged during cardiac ablation procedures. Securus’s thermal monitoring system was approved by the FDA in 2016 for use in cardiac ablation.
According to Securus, the thermal monitoring systems currently available are less efficient as they provide measurements at fixed locations only and have slower response systems. Boston Scientific plans to integrate Securus’s system with its cardiac mapping system, Rhythmia HDx. Securus’s technology is expected to made commercially available by Boston Scientific in 1H19.