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Medtronic Buys Two Heart Valve Companies for $1.03 billion

by Lynn Shapiro, Writer | February 25, 2009
Medtronic, Inc. said Monday it is buying two privately owned heart-valve companies for $1.03 billion. The companies both have transcatheter technology that enables the replacement of diseased aortic heart valves without the need for open heart surgery.

The purchases will catapult Medtronic into this fast-growing, sought-after market, while pitting it against Edwards Lifesciences, now locked in patent litigation with CoreValve.

Medtronic is buying CoreValve for $700 million plus two, $75 million milestone payments. One milestone is regulatory, contingent on the start of an FDA-approved clinical trial, and the other requires the reaching of a revenue target. Meanwhile, CoreValve competes with Edwards Lifesciences in Europe in the market for valves deployed without open heart surgery. The CoreValve procedure, using the transfemoral approach, has not yet been submitted for FDA approval, but is a winning device in Western Europe.

DOTmed sources report that CoreValve's transfemoral aortic valve is very promising for interventional cardiologists, but that company is encumbered by the cost of its patent litigation with Edwards Lifesciences. Medtronic may be able to absorb those costs easily. Note that FDA has yet to approve CoreValve's trial design.

A Second Acquisition: Ventor Technologies Ltd.

Medtronic announced a second acquisition on Monday: It will also buy Israeli-based Ventor Technologies Ltd., maker of a transapical valve, for $325 million. This valve is implanted via a small incision between the ribs and is suitable in those for whom the femoral option is eliminated by vascular disease.

Daniel Beach, director of Public Relations for Medtronic's CardioVascular unit tells DOTmed News that Medtronic bought both CoreValve and Ventor because their technologies complement each other.

Beach says that about 30 percent of candidates for transcatheter valve replacement "have a concomitant disease that makes it impossible to use the femoral approach. Conditions such as severe peripheral artery disease, or a calcified aortic arch can make it impossible to take the femoral route." That's where Ventor comes in. The company "has a transapical valve that goes through the bottom (apex) of the heart and then is deployed. The Nitinol stent expands like a spring and pushes the diseased valve into the vessel walls. As the stent opens, a tissue valve inside the stent takes over the job of performing the valve function," Beach says.

He adds, "One reason we're so excited by the acquisition is that the transcatheter valve space is going be one of, if not the fastest-growing medical technology over the next 10 years.

"Today," he says, "the market for catheter valves now used in Western Europe is about $150 million. "Over the next 10 years, as we improve the design and gather the necessary clinical data, we think the market will grow, up to $3.5 billion a year."