Boston Scientific to acquire Vertiflex for USD 465 million

Boston Scientific has entered into a definitive agreement to acquire Vertiflex, Inc., a privately held company which has developed and commercialized the Superion Indirect Decompression System, a minimally-invasive device used to improve physical function and reduce pain in patients with lumbar spinal stenosis (LSS). The procedure – primarily performed by physicians who treat chronic pain patients with therapies including spinal cord stimulation and radiofrequency ablation – is expected to reach USD 60 million in sales in 2019. The transaction consists of USD 465 million in upfront cash and additional payments contingent on commercial milestones for the next three years.

The Superion System – approved by the US Food and Drug Administration (FDA) in 2015 for patients with moderate degenerative LSS – creates space between the spinous processes of the vertebrae. The creation of this space reduces pressure on the nerves and can thereby improve patient mobility and relieve pain, numbness, and cramping in the legs. This procedure is a treatment option for patients who have not responded positively to first-line therapies, such as oral pain medication and steroid injections, but do not have severe enough symptoms to require spinal fusion or laminectomy.

The transaction is expected to be immaterial to adjusted earnings per share in 2019 and 2020, and accretive thereafter. On a GAAP basis, the transaction is expected to be less accretive, or more dilutive as the case may be, due to amortization expense and acquisition-related net charges. The acquisition is projected to close late in the second quarter of 2019, subject to customary closing conditions.