Medtronic Completes Acquisition Of Sophono, Inc., Minimally Invasive Bone Conduction Hearing Implant Technology

Acquisition Expands Medtronic's ENT Portfolio with Innovative Hearing Restoration Therapy

Medtronic plc announced recently that it has completed the acquisition of Sophono, Inc., a privately held developer and manufacturer of innovative magnetic hearing implants in Boulder, Colorado. This acquisition enables Medtronic's Ear Nose and Throat (ENT) business to continue its focus on novel therapies and innovative technology solutions and supports Medtronic's therapy innovation strategy. Terms of the deal were not disclosed.

"As the leader in ENT products and therapies, Medtronic is proud to add Sophono's minimally invasive, low profile hearing implants to our extensive otologic portfolio," said Mark Fletcher, senior vice president and president of the Surgical Technologies business, which is part of the Restorative Therapies Group at Medtronic. "This acquisition enables us to partner with more surgeons worldwide to help more patients experience better hearing."

Sophono's magnetic bone conduction hearing implants are currently available in 42 countries and have been implanted in more than 4,000 patients. These implants are intended for patients 5 years and older with single-sided deafness (SSD) or conductive, mixed hearing loss. The slim-profile implant and magnetic, transcutaneous Alpha 2 MPO sound processor enables ENTs and audiologists to restore patient hearing through a simple, minimally invasive procedure. Sophono's breakthrough Transcutaneous Energy Transfer (TET) technology makes it the only transcutaneous hearing system on the market that is optimized for sound transmission through the skin. The Alpha 2 MPO allows patients to achieve improved hearing without the potential skin-related complications associated with current abutment-based percutaneous systems.

In several recently published studies, using the Sophono device has resulted in significant hearing and speech recognition improvement in patients with conductive, mixed hearing loss or SSD.^1-7 Preliminary results from a multi-device clinical study presented at the 2015 Ultimate Colorado Midwinter Meeting in Vail, Colorado, demonstrated better Alpha 2 MPO performance at higher sound frequencies than currently available percutaneous and transcutaneous options.⁸

According to the World Health Organization, disabling hearing loss affects 360 million people worldwide. Within the United States alone, approximately 48 million people suffer from hearing loss.

Medtronic will include revenue from the Sophono product line as part of the Surgical Technologies division within the Restorative Therapies Group segment. The transaction is expected to meet Medtronic's long-term financial metrics for acquisitions, and the annualized earnings impact of this acquisition is not expected to be material.

About Medtronic Surgical Technologies
The Surgical Technologies business develops products and procedural solutions for surgical applications that include ear, nose, and throat; neurosurgery; spinal surgery; orthopaedics; and surgical oncology. The business designs, develops, manufactures, and supports healthcare providers with surgical navigation and imaging solutions, powered surgical tools and systems, intraoperative nerve monitoring devices, advanced energy-based devices for hemostatic sealing and tissue dissection, and implantable devices for hydrocephalus management.

About Medtronic
Medtronic plc, headquartered in Dublin, Ireland, is the global leader in medical technology - alleviating pain, restoring health and extending life for millions of people around the world. For more information, visit www.medtronic.com

¹ Denoyelle F, Coudert C, Thierry B, Parodi M, Mazzaschi O, Vicaut E, Tessier N, Loundon N, Garabedian EN. Hearing rehabilitation with the closed skin bone-anchored implant Sophono Alpha1: Results of a prospective study in 15 children with ear atresia. Int J Pediatr Otorhinolaryngol. 2015 Mar;79(3):382-7.

² Magliulo G, Turchetta R, Iannella G, di Masino RV, de Vincentiis M. Sophono Alpha System and subtotal petrosectomy with external auditory canal blind sac closure. Eur Arch Otorhinolaryngol. 2014 Jun 8. [Epub ahead of print] PubMed PMID: 24908070.

³ O'Niel MB, Runge CL, Friedland DR, Kerschner JE. Patient outcomes in magnet-based implantable auditory assist devices. JAMA Otolaryngol Head Neck Surg. 2014 Apr 24. [Epub ahead of print] PubMed PMID: 24763485.

⁴ Marsella P, Scorpecci A, Vallarino MV, Di Fiore S, Pacifico C. Sophono in pediatric patients: the experience of an Italian tertiary care center. Otolaryngol Head Neck Surg. 2014 Apr 8;151(2):328-332.

⁵ Centric A, Chennupati SK. Abutment-free bone-anchored hearing devices in children: initial results and experience. Int J Pediatr Otorhinolaryngol. 2014 May;78(5):875-8.

⁶ Siegert R. Partially implantable bone conduction hearing aids without a percutaneous abutment (Otomag): technique and preliminary clinical results. Adv Otorhinolaryngol. 2011;71:41-6.

⁷ Sylvester DC, Gardner R, Reilly PG, Rankin K, Raine CH. Audiologic and surgical outcomes of a novel, nonpercutaneous, bone conducting hearing implant. Otol Neurotol. 2013 Jul;34(5):922-6.

⁸ Kohan D. Baha with Abutment, Baha Attract, and Sophono - Audiologic and Surgical Outcome. Preliminary results presented at 2015 Ultimate Colorado Midwinter Meeting Program, Vail, Colorado, February 3, 2015.