Philips to acquire Spectranetics, expands image-guided therapy business

Health tech giant Philips has announced plans to acquire The Spectranetics Corporation, a US supplier of vascular intervention and lead management products.

The implied value of the purchase is approximately €1.9 billion, inclusive of Spectranetics’ cash and debt. The board of directors of Spectranetics has approved the transaction and recommends the offer to its shareholders. The transaction is expected to close in the third quarter of 2017.

Philips has a portfolio of interventional imaging systems and devices, planning and navigation software, and services, serving a large, global customer base and supported by a global network of leading clinical partners.

The acquisition of Spectranetics will further expand its image-guided therapy business group. Spectranetics is a leader in vascular intervention to treat coronary and peripheral artery disease, and in lead management for the minimally invasive removal of implanted pacemaker and implantable cardioverter defibrillator (ICD) leads. Spectranetics is currently growing double digits and projects 2017 sales to be in the range of USD 293 million to USD 306 million.

Spectranetics' device portfolio includes a range of laser atherectomy catheters for treatment of blockages with laser energy in both coronary and peripheral arteries; the AngioSculpt scoring balloon used to mechanically push a blockage aside in both peripheral and coronary arteries; the AngioSculptX scoring balloon, which is reportedly the only drug-coated scoring balloon in the market, and the Stellarex drug-coated balloon, which treats common to complex lesions while inhibiting the recurrence of these blockages. All of these market segments exhibit high growth rates.

The Stellarex drug-coated balloon is a key growth driver in Spectranetics’ portfolio. Stellarex already is CE-marked, and under review by the FDA for premarket approval in the US. The drug-coated balloon segment is one of the fastest growing segments in peripheral vascular procedures. Top-tier outcomes in the most complex patient population studied in drug-coated balloon IDE trials indicate that Spectranetics’ Stellarex has excellent clinical performance with proven results in complex disease.

“Today’s exciting announcement follows a series of bolt-on acquisitions to strengthen our portfolio across the health continuum,” said Frans van Houten, CEO of Philips. “Building on the successful integration of the Volcano acquisition in early 2015, we are now accelerating our strategic expansion into therapy devices with the agreement to acquire Spectranetics. This transaction is expected to be revenue growth and profit accretive by 2018, given the projected revenue and productivity synergies. Spectranetics’ highly competitive product range, integrated with our portfolio of interventional imaging systems, devices, software and services will enable clinicians to decide, guide, treat and confirm the appropriate cardiac and peripheral vascular treatment to deliver enhanced care for patients with better outcomes, as well as significantly boost recurring revenue streams for Philips.”

“We are pleased to announce this agreement with Philips, which will deliver significant value to our shareholders,” said Scott Drake, President and CEO of Spectranetics. “Combining Philips’ innovations in image-guided therapy with Spectranetics’ portfolio and expertise in the therapeutic device space will create exciting opportunities and allow us to accelerate growth. As part of Philips, we will have the scale and resources to expand Spectranetics’ portfolio of highly differentiated products, our robust innovation pipeline, and our clinical data compendium. This transaction is a testament to the hard work and dedication of Spectranetics’ talented teammates. We have tremendous respect for Philips, as our two companies have a shared view on the importance of culture, values, and innovation, as well as a shared focus on improving patients’ lives around the world. We look forward to a smooth transition.”

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