Johnson & Johnson said Tuesday it will buy heart failure implant company V-Wave in a deal worth a potential $1.7 billion.
J&J entered into a definitive agreement to acquire the privately held company for an upfront payment of $600 million, subject to customary adjustments, with the potential for additional regulatory and commercial milestone payments up to approximately $1.1 billion. V-Wave will join J&J as part of its medtech division, the company said.
The planned acquisition of V-Wave will extend J&J MedTech’s position as an "innovation leader in addressing cardiovascular disease," the company said in a press release. It will further "accelerate its shift into high-growth and high-opportunity markets and will deepen its relationships with structural interventional cardiologists and heart failure specialists," the healthcare conglomerate said.
The deal is expected to close before the end of 2024.
It's J&J's second major deal this year to expand its portfolio in the heart disease devices market. In April, the company inked a $13.1 billion deal to bring Shockwave Medical into the fold. J&J MedTech sees Shockwave’s pioneering portfolio of intravascular lithotripsy catheters—minimally invasive devices that use acoustic energy to shatter the hard, calcified blockages found deep within coronary and peripheral arteries—as the ticket to its 13th priority platform: one that will join its pantheon of products that each claim more than $1 billion in annual sales, Fierce Medtech's Conor Hale reported.
The Shockwave Medical deal followed up on 2023’s integration of the miniature heart pump maker Abiomed, a $16.6 billion buy, as well as J&J’s $400 million purchase of cardiac implant developer Laminar, aimed at reducing a person’s long-term risk of stroke linked to atrial fibrillation.
V-Wave’s cardiovascular implant technology specifically targets heart failure with reduced ejection fraction (HFrEF). In HFrEF, a patient’s heart muscle has insufficient ability to pump blood containing oxygen and nutrients to the body. V-Wave’s Ventura Interatrial Shunt (IAS) is an implantable device designed to decrease elevated left atrial pressure seen in congestive heart failure by creating a shunt between the left and right atrium, thereby reducing cardiovascular events and heart failure hospitalizations.
The device is placed in the heart through a minimally invasive catheter-based procedure and has the potential to fill a significant treatment gap between guideline directed medical therapies as a first line therapy and highly invasive cardiac replacement therapies, including left ventricular assist devices and heart transplantation, according to the company.
V-Wave received FDA breakthrough device designation in 2019 and a CE mark in 2020.
"We recognize the importance of identifying more diverse and effective treatments for heart failure, and our recent track record demonstrates our focus on accelerating our impact on the most urgent and pressing unmet needs," said Tim Schmid, executive vice president and worldwide chairman of Johnson & Johnson MedTech, in a statement. "We know V-Wave well, with our relationship dating back to our original investment in the company in 2016, and we have a deep understanding of the technology and science, as well as the company’s commitment to patients. We look forward to working with the V-Wave team at this pivotal stage of its evolution to bring the Ventura® Interatrial Shunt technology to patients.”
In accordance with U.S. GAAP, the transaction will be accounted for as an asset acquisition, resulting in a nontax deductible in-process research and development charge of approximately $600 million in the period the transaction closes, the company said. Johnson & Johnson expects the transaction to dilute adjusted earnings per share by approximately $0.24 in 2024 and approximately $0.06 in 2025.