Boston Scientific is infusing medical device company Millipede with $90 million, an equity investment that comes with the option to acquire the startup outright.
According to the agreement, Marlborough, MA-based Boston Scientific (NYSE: [[ticker:BSX]]) must exercise its option to acquire Millipede before the startup completes its ongoing clinical trial for its heart valve repair device—as long as that trial meets certain undisclosed parameters. If the acquisition does not happen by the end of the clinical trial, which could wrap up by early summer, Santa Rosa, CA-based Millipede has the option to compel Boston Scientific to buy the rest of the company it does not already own. The options of both companies expire at the end of next year.
The Millipede device is designed to treat severe mitral regurgitation (MR), in which blood flows backwards in the heart through a leaky mitral valve. The condition can lead to heart failure, abnormal heart rhythm, high blood pressure, and other problems, according to the Mayo Clinic. Millipede says many patients with severe MR have weak hearts and cannot undergo open-heart surgery to either repair or replace the valve. Citing figures from BMO Capital Markets, Millipede says that of the estimated 4.1 million U.S. patients who have the condition, more than 1.6 million would be eligible for its treatment.
The Millipede device, called the IRIS Transcatheter Annuloplasty Ring System, is delivered through the femoral vein to repair the valve, and could offer an alternative to surgery. The implanted ring is meant to work by reducing the size of the valve opening to reduce leaking.
Millipede was founded in 2012 by majority investor Santé Ventures and Steven Bolling, a professor of cardiac surgery at the University of Michigan. The company is testing its device in a clinical trial with a targeted enrollment of 10 patients. The main goal of the trial is to implant the device and monitor patients for complications for 30 days following the procedure. The secondary goal is reducing mitral regurgitation “to optimal or acceptable levels.” The study is expected to be completed in June.
An acquisition of Millipede would add to Boston Scientific’s interventional cardiology business unit, which accounted for more than $2.2 billion in 2016 revenue. Exercising its option to acquire Millipede would put Boston Scientific on the hook to pay the startup $325 million. Boston Scientific would be responsible for securing FDA approval for the Millipede device. The startup is in line to receive an additional $125 million from Boston Scientific if the heart device hits commercial milestones.
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