Johnson & Johnson (J&J) will acquire heart failure implant company V-Wave in a deal worth a potential $1.7bn, marking the latest billion-dollar boost to the medtech giant’s cardiovascular device portfolio.
Expected to close by the end of this year, the deal will see V-Wave join J&J’s MedTech division. On top of the $600m upfront payment, the two companies have agreed to regulatory and commercial milestone payments of up to around $1.1bn.
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J&J said the acquisition will “further accelerate its shift into high-growth and high-opportunity markets”.
Shares in the NYSE-listed company opened at similar price at market open compared to a pre-announcement market close. J&J has a market cap of $384bn.
The cardiovascular device market was worth $68.5bn last year and is expected to grow to more than $115bn by 2033, according to analysis by GlobalData.
GlobalData analyst Joselia Carlos said: “Acquiring other established MedTech companies, such as V-Wave, is notably one of J&J’s ways of strategically expanding its portfolio, as well as strengthening its spot as a cardiovascular MedTech leader.”
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By GlobalDataIsrael-based V-Wave is known for developing its implant that targets heart failure with reduced ejection fraction (HFrEF) – characterised by the left ventricle not pumping efficiently enough to push blood into circulation.
V-Wave’s catheter-mediated device, named Ventura Interatrial Shunt (IAS), is designed to decrease elevated left atrial pressure seen in congestive heart failure by creating a shunt between the left and right atrium.
V-Wave won breakthrough device designation from the US Food and Drug Administration (FDA) in 2019 and CE marking a year later.
J&J reckons the technology could fill a significant treatment gap between more invasive cardiac replacement therapies – such as left-ventricular assist devices (LVADs) and heart transplantation – and drug-based therapies.
Carlos added: “Currently, there is an unmet need for approximately 800,000 patients who experience heart failure with reduced ejection fraction (HFrEF). V-Wave’s implantable device has the potential to address this treatment gap. Since J&J’s acquisition of Abiomed in 2022, J&J has already positioned itself as the market leader in the HF space, and its planned acquisition of V-Wave will further strengthen its position.”
J&J MedTech’s executive vice-president Tim Schmid said: “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.”
J&J expects the V-Wave deal to dilute adjusted earnings per share (EPS) by approximately $0.24 in 2024, with 2025 seeing a $0.06 boost. The company added it will provide an update to its full-year financial outlook during its Q3 report in mid-October.
This is not the first time this year that J&J has solidified its cardiovascular device division. The company spent $13.1bn to acquire Shockwave Medical in April this year in one of the biggest medtech deals in recent years. Shockwave specialises in coronary artery disease (CAD) and peripheral artery disease (PAD) treatments. The company’s core products are its intravascular lithotripsy (IVL) devices, which are used to remove calcified plaques in arteries.
J&J has made several other big money moves in the cardiovascular space in recent years. The Shockwave deal is only beaten in value in the medtech sector by another of J&J’s deals – the acquisition of heart recovery company Abiomed for $16.6bn in November 2022. The giant also made an upfront payment of $400m to acquire atrial fibrillation device maker Laminar in December 2023.
J&J is bracing itself for a likely loss in revenue from blockbuster psoriasis drug Stelara, with rival copies of the drug expected to launch next year.
Note: This article’s headline was amended on 20 August to correctly state the deal is worth up to a potential $1.7bn. The article was also updated to include analyst comment.
