Shockwave Medical Makes Bid to Merge Neovasc Cardiac Device Division With Its Own
Neovasc, a world leader in developing minimally invasive therapies, has recently shifted focus. It has indefinitely paused development of its mitral regurgitation device, Tiara, and it has committed to progressing Reducer as a refractory angina treatment, though this enthusiasm was not shared with investors. The company’s market capitalisation dropped to $20M last year, despite Doug Godshall, the CEO of Shockwave, identifying Reducer as the right fit for his plans to expand the company’s portfolio.
“We’ve been looking for novel therapies that have the potential to treat a large, poorly served patient population, much like lithotripsy for treating calcified arteries was when we started. We’ve stayed away from opportunities that would be a distraction to our U.S. sales team in the next couple of years as we need to maintain our focus on aggressively growing our IVL franchise,” Godshall said on a conference call with investors to discuss the acquisition. Obviously, it’s a pretty short list of technologies that fit through our screen, but we believe our patience and diligence have paid off and that we have found just such an opportunity in the Neovasc Reducer system,” he said.
Shockwave has made an offer of $27.25 upfront in cash for every one of Neovsc’s outstanding shares. This price weighs in significantly higher than the closing price for the shares in recent weeks, and almost 70% above their average price in the months preceding. Alongside unspecified admin costs, the total deal value of Shockwave’s offer is around $100M.
“Our team at Shockwave has proven that we excel at developing products and markets for large, underserved patient populations and commercializing innovative solutions for these patients. We believe the Reducer is an excellent fit for Shockwave as it enables us to apply our capabilities to address another large, unmet need within cardiology—refractory angina,” Shockwave CEO Doug Godshall said in Tuesday’s announcement.
The Reducer attained CE mark clearance over a decade ago in Europe, whilst being tapped for a ground-breaking device designation from the FDA back in 2018. Neovasc is currently recruiting patient volunteers for a randomised clinical trial, which would support the application for full approval from the FDA of the device.