Abbott closes $25 billion St. Jude Medical acquisition
- Abbott has completed its $25 billion acquisition of St. Jude Medical, following receipt of all regulatory clearances, the healthcare company announced.
- The cash-and-stock deal creates one of the world’s largest cardiovascular device companies.
- Combined, their cardiovascular and neuromodulation portfolios have annual sales of about $8.7 billion, Abbott said.
The merger melds St. Jude’s strength in heart failure devices, catheters and defibrillators with St. Jude’s prowess in coronary intervention value repair. St. Jude bolstered its heart failure business a little over a year ago with the purchase of Thoratec for $3 billion.
Grand View Research projects the global cardiovascular device market will reach $121 billion by 2024. And 2017 will see a number of new product introductions, including the HeartMate3 heart failure device and Absorb bioresorbable coronary stent, according to Abbott.
“Customers today want partners who offer breakthrough technologies with a broad portfolio of solutions to help them better care for their patients,” Abbott Chairman and CEO Miles White said in a statement. “Our powerful and complementary medical device portfolio and industry-leading new product pipeline will help us to be that partner, uniquely positioning us to win in the marketplace.”
To dodge antitrust issues and gain regulatory approval, Abbott and St. Jude agreed to sell parts of their vascular closure and electrophysiology businesses to Terumo Corp.
Reports of device hacking risks associated with St. Jude cardiac devices, aired last summer, caused some to question if the merger would go through. St. Jude’s shares dropped more than 8% following a report by Muddy Waters Capital and cybersecurity firm MedSec about the vulnerabilities. Muddy Waters urged the devicemaker to recall its devices and address the problem, and raised the specter of protracted lawsuits due to negligence.
St. Jude denied the allegations but subsequently recalled the devices after an investigation by outside experts confirmed Muddy Waters and MedSec’s claim. In the wake of the rumpus, St. Jude announced it was forming a medical advisory board to focus on cybersecurity and safety of connected medical devices.