Boston Scientific acquires NxThera

The acquisition expands Boston Scientific’s portfolio with a minimally invasive treatment option for patients with benign prostatic hyperplasia

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MARLBOROUGH, Mass.,—Boston Scientific announced today that it has entered into a definitive agreement to acquire NxThera, a privately-held company based in Maple Grove, Minnesota. NxThera developed and commercialized, in the US and Europe, the Rezūm system - a minimally invasive therapy for men with symptoms arising from benign prostatic hyperplasia (BPH).
BPH is an enlargement of the prostate that affects 110 million men worldwide and may cause symptoms that impact a patient's qualify of life, such as pain and a frequent need to urinate. The likelihood of having BPH increases with age and more than 12 million symptomatic men in the US are currently being treated for the condition with medications or procedural approaches.
“The Rezūm system is an innovative therapy for men with symptomatic BPH that helps patients with a minimally invasive approach while reducing the cost and unwanted side effects that comes with taking maintenance medications,” said Dave Pierce, senior vice president and president, Urology and Pelvic Health, Boston Scientific. “When compared with other minimally invasive BPH therapies, patients treated with the Rezūm system spend less time in the doctor's office and have longer lasting improvement in their symptoms.”
Patients with symptomatic BPH are generally first treated with medications that can have side effects including nausea, dizziness and sexual dysfunction. As the prostate continues to enlarge, men may undergo surgery which can result in worsening stress, urinary incontinence and erectile dysfunction. Clinical studies have demonstrated that treatment with the Rezūm system, in addition to reducing symptoms of BPH, preserves sexual function. The system was cleared by the U.S. Food and Drug Administration in 2015 and has CE mark. More than 20,000 patients have been treated with the Rezūm system. 
According to NxThera’s website, “Rezūm is a transurethral RF thermal therapy that heats sterile water into vapor (steam), and delivers the vapor into targeted areas of tissue. As the vapor condenses back to its liquid state, a vast amount of stored thermal energy is released into the tissue to heat and kill the tissue cells. Over time, this ablated tissue is almost completely absorbed by the body’s natural healing response, reducing the volume of tissue.”
Treatment with the Rezūm system is typically performed in a physician's office without general anesthesia. A study published in the March issue of the Journal of Urology demonstrated that over a three year period, patients treated with the Rezūm system had clinical progression rates that were five times lower than reported rates of patients treated with daily, long-term medications. Additional clinical data from a randomized controlled trial demonstrated that patients treated with the Rezūm system had a 51 percent reduction in their symptoms at 24 months post-treatment and maintained a 50 percent reduction in BPH symptoms at three years post-treatment.
“We are excited to announce this agreement with Boston Scientific,” said Bob Paulson, president and chief executive officer, NxThera. “Their strong leadership in the field of urology will help drive the Rezūm system forward and ensure that more men have access to this treatment option.”
The transaction consists of an upfront cash payment of $306 million, and up to an additional $100 million in potential commercial milestone payments over the next four years. Boston Scientific has an existing minority investment in NxThera, which is expected to result in a net upfront payment of approximately $240 million upon closing and milestone payments of up to $85 million.
The Boston Scientific Urology and Pelvic Health portfolio includes a range of treatment options for men's and women's urological and gynecological conditions. Upon completion of the transaction, this system will complement the Boston Scientific portfolio of laser therapy systems for the treatment of symptomatic BPH, which includes the Greenlight XPSTM Laser Therapy system and holmium platforms.
The acquisition of NxThera is expected to be immaterial to Boston Scientific adjusted earnings per share through 2020 and accretive thereafter. The transaction is expected to be dilutive (or less accretive, as the case may be) on a GAAP basis, due to amortization and transaction and integration costs. Boston Scientific expects to complete the transaction in the second quarter of 2018, subject to customary closing conditions.

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