US-based HeartWare International has acquired CircuLite, a developer of the Synergy circulatory support system, designed to treat less sick, ambulatory, chronic heart failure patients who are not yet inotrope-dependent.
The $30m cash acquisition broadens HeartWare's technology platform into partial support for less sick patients.
Under the terms of agreement, HeartWare has acquired all of the issued and outstanding equity interests of CircuLite, consisting of approximately $18m in HeartWare common stock and cash of approximately $12m to settle CircuLite's debt and transaction expenses.
Also under the deal will be certain contingent success payments made upon satisfaction of regulatory and commercial milestones not to exceed $320m in the aggregate over a ten-year period.
The Synergy surgical system received CE Mark in the EU in 2012. It is designed for long-term support and intended to reduce the heart's workload while improving blood flow to vital organs.
The system is currently undergoing an upgrade to resolve issues that may incur post-commercial release.
HeartWare president and CEO Doug Godshall said the partial-support system developed by CircuLite represents the industry's most intriguing platform for the treatment of patients with earlier stage heart failure.
"While our HVAD and MVAD systems offer minimally invasive treatment to end-stage heart failure patients, the Synergy platform offers even less invasive and ultimately interventional options to earlier-stage heart failure patients," Godshall said.
Upon the achievement of certain specified regulatory and revenue-based milestones, the CircuLite security holders may be entitled to receive additional clinical and commercial success payments.
The potential regulatory milestone payments include $20m payable in HeartWare common stock upon full European re-launch of the Synergy surgical system; up to $75m payable in cash or HeartWare common stock upon CE Mark of the Synergy endovascular system; and $50m payable in cash or HeartWare common stock upon the FDA pre-market application approval of the Synergy endovascular system.
The potential revenue-based success payments include up to $15m payable in cash or HeartWare common stock when the 12-month trailing sales of the Synergy surgical system reach $30m; $85m payable in cash or HeartWare common stock upon achievement of the 12-month trailing sales of $250m of Synergy systems (surgical or endovascular); and up to $75m (subject to adjustment) in royalties on sales of surgical and endovascular CircuLite products payable in cash or HeartWare common stock.
This transaction was approved by the board of directors of HeartWare and board of directors and shareholders of CircuLite.
Perella Weinberg Partners acted as financial advisor to HeartWare, while Credit Suisse served as financial advisor to CircuLite.