News Feature | September 3, 2015

HeartWare Spends $800M For Mitral Valve Repair Company Valtech

By Jof Enriquez,
Follow me on Twitter @jofenriq

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HeartWare International Inc., maker of left ventricular assist devices (LVADs) for the treatment of heart failure, has agreed to acquire Israeli firm Valtech Cardio Inc., a developer of non-invasive transcatheter mitral and tricuspid valve repair and replacement technologies, in an all-stock, no-cash deal that is expected to close late in 2015.

According to the Jerusalem Post, the complex transaction is valued at approximately $800 million. Under the deal, Valtech shareholders will receive an up-front consideration of 4.4 million shares of HeartWare common stock; 800,000 shares of HeartWare common stock, contingent upon CE Mark approval for Valtech's Cardioband product; and 700,000 shares of HeartWare common stock upon first-in-man implants for either Cardioband tricuspid or CardioValve system (whichever occurs first). The deal also calls for additional stock purchase and earn-out payments based on the attainment of future sales targets.

Valtech was founded in 1996 in the Incentive technological incubator in Ariel, Israel, according to the Jerusalem Post. The company has raised $26 million to date from investors that include Peregrine, OXO Capital Valve Ventures LLC, NGN Biomed Opportunity II LP, and HeartWare, which previously held an undisclosed stake.

Advanced heart failures often are co-morbid and a sequela of mitral valve regurgitation (MR) and tricuspid valve regurgitation (TR), the two most prevalent heart valve diseases. HeartWare, with its flagship HVAD device, is a recognized leader in LVAD implants for treating heart failure. With the company's purchase of Valtech, HeartWare rounds out its portfolio of cardiac devices to treat heart failure, beyond its linchpin LVAD devices, into transcatheter mitral and tricuspid valve repair and replacement devices.

"We have been actively monitoring the mitral space for several years, given the overlap of patient population and referral channel with our VAD business," says Doug Godshall, president and CEO of HeartWare, in a press release. "Valtech provides HeartWare with commercial-stage products for mitral repair, as well as a robust technology pipeline, an advanced R&D center and an impressive, experienced team with a proven track record.  This combination represents an attractive opportunity for value creation for HeartWare shareholders, customers, employees and patients by expanding HeartWare's footprint in the high-growth structural heart market."

As stated in the release, Valtech's products include:

  • Cardioband: first interventional, transfemoral, direct annuloplasty system designed for mitral and tricuspid repair
  • CardioValve: a transseptally delivered, low-profile, transcatheter mitral valve replacement (TMVR) system with five degrees of steering maneuverability
  • Cardinal: a differentiated, semi-rigid, adjustable annuloplasty ring system that provides surgeons with the ability to optimize annuloplasty results by enabling fine-tuning of the ring diameter and leaflet coaptation on a beating heart under real-time echocardiographic guidance
  • V-Chordal: a surgical and interventional chord replacement system for MR repair

HeartWare is particularly upbeat about Cardioband, which is expected to receive CE Mark approval for mitral valve repair in 2015, and is slated to apply for a U.S. Investigational Device Exemption (IDE) in 2016.

"The Cardioband transfemoral annuloplasty system represents a more reproducible and predictable platform for mitral valve repair than existing solutions.  We believe Cardioband will be a natural and clear selection as a first-line treatment for the broadest spectrum of MR patients, since it offers a safer option and, even in early clinical use, has already demonstrated a strong efficacy profile," adds Godshall in the release.

Established companies looking to remain competitive in the market for both heart failure and its associated transcatheter heart valve replacement devices lately have been busy in the M&A front. In July, Edwards LifeSciences bought CardiAQ Valve Technologies, a developer of transcatheter-based implants for the treatment of MR, for $400 million. Shortly after, St. Jude announced the purchase of LVAD maker and HeartWare rival Thoratec, for $3.4 billion. In separate transactions, Abbott inked deals with heart valve developers Tendyne and Cephea. In August, Medtronic acquired mitral valve device developer Twelve, Inc. for $458 million.