- Shockwave Medical said it agreed to buy Neovasc for about $100 million to gain control of an investigational minimally invasive treatment for refractory angina.
- The device, Reducer, is an adjunctive therapy to treatments of coronary heart disease that is implanted to redistribute blood to ischemic areas of the heart. Neovasc already has a CE mark for the device and last year said it was targeting a 2025 approval in the U.S.
- Shockwave has been seeking to expand its pipeline with a device that targets an adjacent opportunity to its intravascular lithotripsy (IVL) calcified plaque treatment and addresses a large unmet medical need.
Neovasc has shifted its focus in recent years, indefinitely pausing development of its Tiara mitral regurgitation device and committing to advancing Reducer as a treatment of refractory angina. Investors showed little enthusiasm for the strategy. Neovasc’s market capitalization fell to $20 million last year even as Shockwave CEO Doug Godshall identified Reducer as a good fit for his portfolio expansion plans.
“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.
Shockwave also preferred that its first strategic move remain in the cardiovascular space and ideally would be a new therapy it could deliver to its current customers, Godshall added.
“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’s investors have doubts as the company’s shares fell 5% to $192.50 on the Nasdaq exchange on Tuesday, the day it announced the Neovasc purchase. The deal is expected to close in the first half of the year.
Shockwave shared details of the takeover alongside preliminary 2022 revenue, which at $489 million to $490 million exceeded the top end of its forecast range.