On August 20, Johnson & Johnson announced that it had reached a definitive acquisition agreement with V-Wave. According to the agreement,Johnson & Johnson to Acquire V-Wave for $600 Million (Approx. RMB 4.3 Billion) Upfront PaymentBut must be adjusted according to convention,And may receive up to approximately $1.1 billion in additional regulatory and commercial milestone payments.

Thus,The total amount of the acquisition is approximately 1.7 billion US dollars (approximately 12.1 billion RMB).It is reported that the transaction is expected to be completed by the end of 2024, subject to applicable regulatory approvals and other customary closing conditions.

Data shows that V-Wave, founded in 2009, focuses on developing percutaneous implantation technology for patients with chronic heart failure.Its core product, the Ventura Interatrial Shunt atrial shunt device,Can relieve symptoms for heart failure patients and improve their quality of life.

In the past two years, Johnson & Johnson has been increasingly focusing on the cardiovascular field. Previously, Johnson & Johnson acquired Abiomed, the leader in artificial hearts, and Shockwave, a company in the cardiovascular intervention field.The total amount of the two acquisitions is nearly 30 billion US dollars.So, why is Johnson & Johnson acquiring V-Wave this time?

It is reported that the acquisition of V-Wave will strengthen Johnson & Johnson's position as an innovative leader in addressing cardiovascular diseases, further accelerate its transformation into high-growth and high-opportunity markets, and deepen its relationships with structural interventional cardiologists and heart failure specialists.

Johnson & Johnson expects the deal to dilute adjusted earnings per share (EPS) by approximately 24 cents in 2024 and 6 cents in 2025.The company plans to provide an update on its full-year outlook when it announces its third-quarter results on October 15, 2024.

After the acquisition is completed, Johnson & Johnson plans to integrate V-Wave into its medical technology division.And include financial reports as part of its cardiovascular portfolio.In addition,Michael Bodner, President of Johnson & Johnson's Cardiac Rhythm Management and Intravascular Lithotripsy Division, will become the head of V-Wave.

Regarding this acquisition, Tim Schmid, Executive Vice President of Johnson & Johnson, stated: "We are delighted to welcome V-Wave to Johnson & Johnson and take another significant step toward transforming the standard of care for cardiovascular diseases. We recognize the importance of identifying more diverse and effective treatments for heart failure, and our recent track record demonstrates our focus on accelerating impact on the most urgent and unmet needs."

Tim Schmid said,The relationship between Johnson & Johnson and V-Wave dates back to 2016, when Johnson & Johnson invested in V-Wave."We have a deep understanding of technology and science, as well as V-Wave's commitment to patients, and look forward to collaborating with the V-Wave team during this critical phase of their development to help patients with the V-Wave Ventura Shunt atrial shunt technology."

Heart failure, as a common cardiovascular disease, seriously affects the quality of life of patients. Despite significant advances in medical and device therapies over the past few decades, the incidence and mortality of left-sided heart failure remain high. In patients with chronic heart failure,Elevation of left atrial pressure leading to pulmonary congestion is a common mechanism for symptom exacerbation and acute decompensation.

In recent years, atrial shunt technology has begun to attract industry attention as an emerging therapy for heart failure. It is reported that,Atrial shunt can achieve shunt decompression, relieve excessive left atrial volume, and improve symptoms caused by heart failure.Improving patients' quality of life is an emerging minimally invasive interventional treatment.

It should be noted that atrial shunt technology has always been highly controversial, with many people believing that this technology does not have significant clinical effects. Currently, multiple innovative medical device companies worldwide are developing various types of atrial shunt technologies.Among them, Corvia Medical supported by Edwards and V-Wave supported by Johnson & Johnson have made the fastest progress. Edwards and Johnson & Johnson invested in these companies many years ago.

It should be noted that currently, no atrial shunt device has been approved by the FDA. Johnson & Johnson believes,Ventura Interatrial Shunt is expected to become the first atrial shunt device approved by the FDA.Fill the treatment gap in the industry. The product wasIt was awarded the FDA Breakthrough Device designation in 2019 and received CE certification in 2020.

Ventura Interatrial Shunt is a new type of hourglass-shaped implant with a small opening in the middle that allows blood to flow from the left atrium to the right atrium.Its hourglass design aims to create a Venturi-like effect (i.e., a tube that first narrows and then gradually widens) from the high-pressure atrium to the low-pressure atrium, improving the efficiency of blood transfer and allowing for smaller shunts.

Ventura Interatrial Shunt Atrial Septostomy

Meanwhile, Ventura Interatrial Shunt'sNitino hourglass frame design, used to securely anchor the shunt to the fossa ovalis.Prevent displacement or embolization of the shunt device; its biocompatible ePTFE encapsulation is designed to limit tissue growth and maintain device patency.

The cardiovascular intervention field is one of the fastest-growing medical technology markets globally, with a large number of unmet patient needs. According to the "China Cardiovascular Medical Device Industry Innovation White Paper (2021)" report, the global cardiovascular interventional device market size is $48.3 billion (351.044 billion RMB), and it is expected that by 2026, the global cardiovascular medical device market size will reach $82.2 billion (597.430 billion RMB).

Johnson & Johnson, as one of the top ten cardiovascular companies globally,In the past two years, it has been continuously increasing its layout in the cardiovascular field, with two major acquisitions costing hundreds of billions of dollars both pointing to the field of interventional cardiovascular medical devices.

In April this year,Johnson & Johnson Acquires Shockwave, a Cardiovascular Intervention Company, for $13.1 Billion at a PremiumThe latter, as a star enterprise in the global cardiovascular field,The company's product, Intravascular Lithotripsy, is the world's first coronary intravascular shock wave system.Can solve the problem of coronary artery calcification.

In November 2022, Johnson & Johnson acquired Abiomed, the leader in the artificial heart field, for a high price of $16.6 billion.This transaction also became the largest M&A deal in the global medical device industry in 2022. It is reported that Abiomed owns includingAbiomed Breethe OXY-1 System Cardiopulmonary Support System (ECMO) & ECPella, preCARDIA, and Impella Product PortfolioProduct pipelines, including those for high-risk PCI, cardiogenic shock, right heart failure, and severe pulmonary failure, among other clinical indications.

And from the perspective of performance, Johnson & Johnson's M&A strategy in the cardiovascular field has shown initial results. Johnson & Johnson's latest financial report shows that in the first half of 2024, Johnson & Johnson Medical Technology achieved a revenue of $15.778 billion, increasing by 3.3% year-on-year. Among this,Cardiovascular business achieved revenue of $3.679 billion, increasing by 17.8% year-on-year, becoming the business segment with the highest revenue growth in Johnson & Johnson Medical Technology.

Johnson & Johnson stated in response:"Johnson & Johnson is making a strong push into the cardiovascular device business. In a field with significant unmet needs, we have a tremendous opportunity to gain a premium for differentiated innovation."

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