The transaction includes an upfront cash payment of $850 million. Additional payments are contingent on sales performance over the next three years.
Minneapolis-based Relievant developed and commercialized the Intracept intraosseous nerve ablation system for chronic pain. The minimally invasive, FDA-cleared, same-day, outpatient procedure treats chronic vertebrogenic low back pain.
The procedure utilizes targeted radiofrequency energy to ablate the basivertebral nerve (BVN). This stops the nerve from transmitting pain signals to the brain. The procedure takes approximately one hour to perform.
″We anticipate this novel, clinically-backed technology can support our category leadership strategy while expanding access to care for individuals who need personalized treatment,″ said Jim Cassidy, president, Neuromodulation, Boston Scientific. ″Upon close, we look forward to working with the Relievant team to explore opportunities to bring this high-growth therapy to a wider population of people living with chronic low back pain.″
More acquisition details
Boston Scientific expects the deal to close in the first half of 2024, subject to customary closing conditions. It anticipates more than $70 million in sales generated by Relievant in 2023, with year-over-year growth expected to eclipse 50% in 2024.
On an adjusted basis, the company expects an immaterial impact to earnings per share in 2024. It plans for a slightly accretive impact in 2025, with an increasingly accretive effect thereafter. Boston Scientific expects a more dilutive GAAP impact due to amortization expense and acquisition-related charges.
“Today is an exciting step forward to shaping the future of chronic low back pain with Boston Scientific as a leader in the interventional chronic pain space,″ said Tyler Binney, president and CEO of Relievant. ″This is a testament to the exceptionally talented Relievant team and the innovative engine behind the Intracept system. Together with Boston Scientific, we can accelerate our journey to provide life-changing relief to patients by transforming the diagnosis and treatment of vertebrogenic pain.″
The analysts’ view
BTIG analysts Marie Thibault and Sam Eiber maintained their “Buy” rating for Boston Scientific in the wake of this news.
They noted the reach of Relievant, which has seen its Intracept system used to treat more than 10,000 patients commercially. It also has reimbursement options through Medicare and a number of commercial plans.
According to the analysts, the transaction will expand Boston Scientific’s neuromodulation business amid a stall in recent quarters.
The analysts expect more details from Boston Scientific at the company’s Sept. 20 investor day event.
Needham analysts Mike Matson, David Saxon and Joseph Conway echoed the BTIG views on expanding the neuromodulation business. They noted that Intracept could complement its pain management products, including spinal cord stimulators and the Vertiflex Superion spacer.
Truist analysts Richard Newitter, Samuel Brodovsky and Lin Zhang also responded positively to the acquisition.
“Strategically, we see a deal of this type and size being right in [Boston Scientific’s] wheelhouse as a high growth, margin accretive asset that the company can leverage,” the analysts wrote.
More positive news for Boston Scientific
Boston Scientific appears keen on continuing its growth with strategic M&A moves. The company previously showcased this over the course of 2021 and 2022, when it completed a string of acquisitions — including buys of Farapulse, Baylis Medical and Lumenis.
The agreement to acquire Relievant marks the third such move for Boston Scientific in the last 12 months. At the end of 2022, the company announced its plan to acquire a majority stake in Acotec, worth around $523 million. In April, the company completed a $615 million acquisition of Apollo Endosurgery.
However, not all deals worked out. The company’s plan to acquire a majority stake in M.I. Tech fell through in May. It still agreed to acquire about a 10% piece of the Korea-based device manufacturer, though.
On the product front, Boston Scientific has been on a strong run of late, too. Earlier this month, it announced FDA approval for its next-generation Watchman FLX.
Just a week before that, the company reported positive data for its Farapulse system, which led to a favorable reaction from analysts and the market. Just the week before, Boston Scientific received expanded FDA 510(k) clearance for its Visual Ice cryoablation system. Visual Ice’s approval came just weeks after the FDA approved the company’s POLARx cryoablation system for treating paroxysmal AFib.