Top 5 Medical Device M&A Deals in H1 2024: Johnson & Johnson, BD, and Boston Scientific Lead Strategic Acquisitions

Jul 27, 2024 22:15 CST Updated 22:15

Johnson & Johnson

Medical Device R&D and Manufacturer

Shockwave Medical

Cardiovascular Disease Treatment Device Developer

Since entering 2024, the financing environment in overseas markets has significantly improved, essentially returning to 2019 levels. Particularly in the second quarter of 2024, the overseas medical device sector has not only seen an increasing number of financings exceeding $100 million but also a rise in mergers and acquisitions, with multiple transactions surpassing $1 billion. Notably, the total value of the top five M&A deals in just the first half of the year exceeded $24 billion.

These five major mergers and acquisitions have seen the presence of industry giants such as Johnson & Johnson, BD, Boston Scientific, and Edwards. These transactions still reflect the classic overseas model where small companies focus on innovation and large companies dominate the market. Companies like Johnson & Johnson and Boston Scientific have achieved rapid business growth by acquiring innovative technologies. Johnson & Johnson remains focused on the cardiovascular business (employing an all-out aggressive strategy), while Boston Scientific has broader interests (cardiovascular, urology), representing a refined strengthening approach.

Edward is the most focused among them, exchanging cash for non-core businesses to enhance its capabilities in the structural heart field. The BD and Edward deal will trigger an arms race in the valve space, with the well-funded Edward already switching to acquisition mode.

For the second half of the year, more deals are expected as there are still many good targets in the market.

【01】Shockwave Medical

Johnson & Johnson 13.1 billion USD

The top performer in the first half isJohnson & JohnsonIn April, Johnson & Johnson announced the acquisition of Shockwave Medical for $13.1 billion and completed the acquisition in May. The acquisition was reflected in Johnson & Johnson's Q2 financial report, showing that Shockwave Medical contributed $77 million in sales to Johnson & Johnson. Johnson & Johnson raised Shockwave Medical’s annual sales forecast by $500 million and will promote rapid sales growth of Shockwave Medical through a "price discount" policy.According to Johnson & JohnsonShockwave Medical Sales Forecast,Johnson & Johnson will be at the end of this yearBack to the top position in the device industry.

Johnson & Johnson is the most active medical device company in the M&A market in recent years. Although it does not have the highest number of acquisitions, it has the largest acquisition amount (without a doubt). Just Abiomed alone andShockwave Medical's Two Acquisitions Total a Staggering $29.5 Billion, Surpassing All Major Medical Device Giants.

Johnson & Johnson, with Abiomed and Shockwave MedicalThis acquisition, pullingJohnson & Johnson Medical TechnologiesSales Growth. In the second quarter, Johnson & Johnson's medical device group grew by only 2.2%, while the cardiovascular business, where Abiomed and Shockwave Medical are located, surged by 15.6%. In the future, with the continued efforts of Abiomed, Shockwave Medical, and Biosense Webster, the growth is expected to continue.Johnson & Johnson Medical TechnologiesInjecting Rapid Growth Momentum, EspeciallyShockShockwave Medical will maintain a growth rate of over 30% in the future, driven by Johnson & Johnson's low-price strategy and strong sales capabilities, and will soon surpass.Abiomed has become the second largest afterBiosense Webster Will Be Johnson & Johnson's Future Cash Cow。

【02】 Edwards critical care group

BD $4.2 Billion

In June, BD and Edwards reached a final agreement to acquire Edwards' Critical Care product line for $4.2 billion in cash. This is the second-largest M&A deal in the medical device sector in the first half of the year, and it represents a win-win situation for both parties.

For BD, Critical Care expands BD's intelligent and connected care solutions portfolio and complements BD's operating room and intensive care unit services, further strengthening BD's presence in...The field of critical care is becoming more influential.

And Edwards received the long-desired cash and achieved business focus. For Edwards, structural heart disease is its foundation. Edwards' most important TAVR business is under fierce attack by Medtronic. Not only has it been cornered by Medtronic in the academic field, but more importantly, its TAVR market share is also being gradually eroded by Medtronic. Besides Medtronic, Abbott and Boston Scientific are also eyeing covetously. If Edwards...AgainIf no changes are made, the TAVR field may face a major upheaval.

With the saleCritical CaRe-obtain$4.2 billion gave Edwards instant confidence. It also began to emulate top players in the food chain like Medtronic, Abbott, and Boston Scientific, starting a buying spree.

In this month, Edward willCompleted four transactions, involving both the mitral and aortic valves. In the mitral valve sector, the acquisition of Innovave strengthens its competitiveness in the transcatheter mitral valve space (partnering with SAPIEN M3 to eliminate potential competitors). Additionally, it also acquired from Affluence.Shockwave Medical Obtains Kalios, a Transvascular Mitral Annuloplasty Technology, to Support PASCAL (Edge-to-Edge Repair).

In the TAVR field, the acquisition of JenaValve Technology to obtain the Trilogy for treating regurgitation allows Edwards to form differentiated competition with Medtronic, securing its basic market position.

Edward sells Critical CaRe, like the butterfly effect, has triggered a seismic shift in the valve field, prompting giants such as Medtronic, Abbott, and Boston Scientific to join this arms race.

【03】 Axonics

Boston Scientific $3.7 Billion

Boston Scientific in JanuaryAnnounced a definitive agreement to acquire Axonics for $71 per share (total value approximately $3.7 billion). This is Boston Scientific's largest acquisition in recent years.

Due to the involvement of intellectual property issues with Medtronic, andIssues such as the review by the U.S. Federal Trade Commission have prevented the transaction from being completed thus far. The market anticipates that the transaction will be finalized before the end of this year.

The Axonics product line is highly complementary to Boston Scientific's urology portfolio.Axonics SeriesImplantable Sacral Nerve Stimulator Clinically Proven to TreatBladderOveractive Bladder (OAB) induced urinary incontinence and fecal incontinence treatments are very effective. It is also a very popular field overseas at present, including Medtronic and BlueWind Medical.Innovative companies like Valencia Technologies are all entering this track.Once Boston Scientific completes the acquisition ofThe acquisition of Axonics not only makes Boston Scientific's urology product line more complete but also prevents Medtronic from becoming a monopoly.

【04】 Agiliti

Thomas H. Lee Partners（THL）$2.5 billion

In February this year, Thomas H. Lee Partners (THL) announced a $2.5 billion deal with Agiliti to take Agiliti private, and completed the transaction in May.

Agiliti is the leading company in the U.S. third-party medical equipment maintenance and repair industry, with over eighty years of history, serving more than 10,000 medical institutions across the United States, and holding a market share of over 20%.

【05】 Silk Road Medical

Boston Scientific $1.16 Billion

In June this year, Boston Scientific announced that it had reached a definitive agreement to acquire Silk Road Medical for $27.50 per share, with a total value of approximately $1.16 billion.

Silk Road Medical is"Transcarotid Artery Revascularization (TCAR)" pioneer,TCAR surgery overcomes the shortcomings of endarterectomy and stent implantation, capable of "reversing" blood flow during the procedure. This not only prevents detached plaque fragments from flowing to the brain but also filters out plaque debris extracorporeally, significantly reducing the risk of cerebral infarction.

This deal is a relatively small transaction for Boston Scientific, but it is significant enough to drive the growth of its peripheral business. According to Boston Scientific's forecast this year.Silk RoaShockwave Medical will bring Boston Scientific revenue of $194-198 million (An increase of 10%-12% year-over-year), which looks like a sub-track with good growth potential.