Originally Published MX January/February 2006
BUSINESS NEWS
St. Jude Merges into Neuromodulation Market |
| Starks |
In a $1.3 billion deal, St. Jude Medical Inc. (St. Paul, MN) has acquired Advanced Neuromodulation Systems Inc. (ANS; Plano, TX). Now a new division of St. Jude, ANS is a leader in the neuromodulation device market and reportedly holds the number-two market spot in the spinal cord stimulation segment.
"This is a compelling strategic opportunity for St. Jude Medical and is consistent with our efforts to create additional long-term growth drivers that diversify our business mix and deliver value to our shareholders," says Daniel J. Starks, St. Jude Medical chairman, president, and CEO.
In light of the added revenue from the ANS division, St. Jude now expects revenue growth of greater than 20% in 2006.
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| Chavez |
Chris Chavez, president and CEO of ANS, hails the merger as a transaction that will strengthen his company's competitive position on a global basis. Chavez and the executive management team of ANS are expected to remain with the company, which will continue to be headquartered in Plano, TX. Chavez will serve as president of the ANS division.
"It is important for me to emphasize that this proposed combination is not focused on opportunities to consolidate but rather on accelerating the growth of ANS's business by bringing new resources to help us tap our incredible market opportunities," Chavez says. "There is virtually no overlap in the markets served by St. Jude Medical and ANS, but our technologies are extremely complementary."
Prior to being acquired, ANS sold its products in about 30 countries. The recently completed deal will provide it with access to the international distribution and regulatory infrastructure of St. Jude, which has a presence in more than 130 countries.
Neuromodulation, a treatment for chronic pain and nervous system disorders that entails the delivery of small doses of electricity or drugs directly to nerve sites, represents an estimated $1 billion market. According to Chavez, the market has experienced annual growth of greater than 20% in recent years, with strong continued growth expected.
ANS's product offerings include an array of implantable spinal cord stimulation devices. The company has received FDA approval for clinical studies in indications such as Parkinson's disease and essential tremor. ANS is reportedly also exploring therapies related to migraines, depression, obsessive-compulsive disorders, obesity, and angina.
The neuromodulation market has been increasingly drawing the attention of medtech's biggest players in recent years. In 2004, Boston Scientific (Natick, MA) acquired implantable neuromodulation device manufacturer Advanced Bionics Corp. (Valencia, CA) in a $740 million deal. Add that to the established presence of market leader Medtronic Inc. (Minneapolis), and the competition in the neuromodulation sector starts to look fierce.
In addition to its move into the neuromodulation market, St. Jude is looking to further beef up its presence in the cardiac sector. In early December, the company announced that it had signed a definitive agreement to acquire Savacor Inc. (Los Angeles), a privately held device company that has various heart failure diagnostic and therapy guidance products under development and in clinical trials. St. Jude predicted the $50 million deal would close by the end of 2005.
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