Boston Scientific Completes $615M Acquisition of Apollo Endosurgery to Expand Endoluminal and Obesity Treatment Portfolio

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April 4,Boston Scientific Announces Completion of Acquisition of Apollo Endosurgery, a Manufacturer of Endoscopic Endoluminal Consumables.The completion of the transaction will have little impact on the company's adjusted earnings per share in 2023.

According to reports,This acquisition began in November 2022.At that time, Boston Scientific announced the acquisition of Apollo Endosurgery at a cash price of $10 per share.This price reflects an enterprise value of approximately $615 million (approximately RMB 4.231 billion).

"Now, with the completion of the acquisition, Boston Scientific stated: 'The completion of this acquisition represents an exciting step forward in the company’s ability to offer more comprehensive intraluminal surgery and weight loss solutions. We welcome new talent to the endoscopy team, which will help drive medical innovation and improve patient care.'"

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Worth 4.2 Billion Yuan

Boston Scientific Completes Acquisition of Endoscopic Consumables Manufacturer

Data shows that the products of Apollo Endosurgery are mainly endoscopic luminal surgery (ELS) medical devices.Can be used to close gastrointestinal defects, manage gastrointestinal complications, and assist obese patients in losing weight.The company's products includeOverStitch™ Endoscopic Suturing System, OverStitch Sx™ Endoscopic Suturing System, and X-Tack™ Endoscopic HeliX Suturing Systemetc.

July 2022,Apollo Endosurgery's OverStitch™ Endoscopic Suturing System, OverStitch Sx™ Endoscopic Suturing System, and X-Tack™ Endoscopic HeliX Suturing SystemReceived FDA approval.

Previously, upon announcing the acquisition of Apollo Endosurgery, Mike Jones, Senior Vice President of Boston Scientific and President of the Endoscopy Division, stated: "As an emerging field, intracavitary surgery is the core focus of the company's endoscopy business.The differentiated innovation brought by Apollo Endosurgery will continuously strengthen the company's capability layout in the global endoscopic intraluminal surgery field. We will focus on promoting this exciting procedure and continue to make efforts in professional education.Moreover, this acquisition also enables us to enter the entirely new field of endoscopic obesity treatment, achieving strong and sustained business growth.”

It is reported that Endoscopic Sleeve Gastroplasty (ESG) is an endoluminal treatment that has been successfully used to treat obese patients. In ESG,Endoscopic physicians perform full-thickness suturing to restrict gastric capacity and delay gastric emptying; the procedure is reversible and, as an endoluminal surgery, is less invasive.Can avoid some surgical complications and reduce the risk of surgical complications.

In a randomized clinical trial conducted at nine medical centers in the United States, the ESC group showed a significantly greater average percentage of weight loss compared to the control group within one year (14% vs. 1%). The percentage reduction in excess weight (i.e., weight above a BMI of 25 kg/m²) was 49% and 3%, respectively. During the second-year follow-up, most of the weight loss in the ESG group was maintained.Metabolic comorbidities improved in 80% of the ESG group and 45% of the control group. Additionally, serious adverse events occurred in 2% of the ESG group, did not result in illness, and required no surgical intervention.

For specific patients with mild to moderate obesity, the biggest advantage of the ESG procedure is that it can be repeatedly revised through endoscopy to maintain the narrowed stomach cavity.The industry has already proven that ESG is a safe intervention that can significantly reduce weight and maintain it long-term, while also improving metabolic complications.

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Apollo is a global endoscopic consumables manufacturer

Complemented and enriched Boston Scientific's product line

Data shows that Apollo Endosurgery is a high-value consumables manufacturer in the field of digestive endoscopy, mainly addressing the closure of gastrointestinal defects, management of gastrointestinal complications, and obesity.Whether it is the weight loss balloon or the endoscopic stapler, Apollo Endosurgery's product line is a great complement to Boston Scientific, easily forming a 1+1>2 result.

In the past two years,Apollo The majority of Endosurgery's product revenue comes from the Apollo Surgical product portfolio.This includes the Lap-Band system and related laparoscopic-assisted components.Currently, Apollo Endosurgery's products are available in more than 75 countries and regions.The majority of its strategic focus and future revenue growth is expected to come from the Endo-bariatric product portfolio.

Orbera Balloon

The Orbera balloon fills the gap between non-surgical weight loss and bariatric surgery, providing patients with options for medication and dietary advice when needed.It is a weight-loss aid tool, suitable for adults with obesity.

This product, consisting of two parts, adopts a comprehensive weight loss approach that combines the use of an intragastric balloon with a personalized support plan.To address dietary, psychological, and exercise strategies to help adult patients lose weight and maintain their weight.

The ProductCan achieve 3 times the weight loss, rather than diet and exercise alone; key studies in the United States have shown that the average EWL at 6 months was 38.4%.

In 2004, the product was commercially launched outside the United States and has been in production for over 20 years.Has now helped patients in more than 80 countries lose weight; over 277,000 Orbera have been distributed worldwide.Currently, Orbera has been applied worldwide.

It is reported that the Orbera balloon was initially designed by a group of international doctors who identified the characteristics of an ideal intragastric balloon for effective weight loss:

• Spherical, with a smooth and soft surface, reducing the chance of ulcers.
• Filled with sterile saline instead of air to fill the stomach and enhance portion control.
• Can be filled to a volume of 400-700cc
• Radiopaque valve, supports visualization within the stomach

The product should not be applied to the body for more than six months., remaining in the stomach for more than six months can expose patients to complications such as intestinal obstruction, posing life-threatening risks.

OverStitch™ System

OverStitch™ Endoscopic Suturing SystemCovering OverStitch™ and OverStitch Sx,Can provide patients with a wide range of less invasive solutions. The OverStitch™ Endoscopic Suturing System allows physicians to place full-thickness sutures through a flexible endoscope, enabling advanced endoscopic procedures.

OverStitch can facilitate new and emerging endoscopic applications, maintain direct visualization of the surgical site, and also allow for reloading of sutures for better control.The technology and design behind this revolutionary suture system have made it the preferred choice for doctors worldwide.

At the same time, the system helps to minimize the insertion and removal of the endoscope, featuring a knot-free fixation design for rapid and safe closure without the need to tie complex surgical knots.

OverStitch™ Support Depends onClosure, adhesion, or hemostasis of soft tissues in the upper and lower gastrointestinal tractThe procedure. Suturing surgery includes traditional gastrointestinal applications,Such as fistula closure, endoscopic submucosal dissection (ESD), endoscopic mucosal resection (EMR), and peroral endoscopic myotomy (POEM) procedures.

OverStitch Sx™ is compatible with more than 20 single-channel flexible endoscopes and 4 platforms, allowing doctors to place full-thickness sutures.Achieve advanced intraluminal closure. The OverStitch Sx™ has the ability to customize suture patterns, allowing for full-thickness suturing using a single-channel endoscope, providing a wide range of therapeutic options for endoscopic procedures.

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Endoscopy is one of Boston Scientific's seven solutions.

Accounted for 17.5% of the company's total revenue in 2022

As a global leading medical device enterprise, Boston Scientific's business covers cardiac intervention, electrophysiology, cardiac rhythm management, neuromodulation, peripheral and tumor intervention, endoscopic intervention, urology and pelvic floor health.

Boston Scientific's net sales in 2022 were $12.682 billion, a year-on-year increase of 6.7%.Among them, the net sales of the endoscopy business were 2.221 billion US dollars, increasing by 3.7% year-on-year. The endoscopy business accounted for 17.5% of the company's total performance.

As a global giant in high-value medical devices,Boston Scientific's layout for disposable endoscopes starts with urology and gastrointestinal endoscopy, which are most relevant to its business.In December 2019, Boston Scientific's EXALT MODEL D, the world's first disposable duodenoscope, was approved by the U.S. FDA and granted "Breakthrough Device Designation."

In May 2021, Boston Scientific's EXALT B Bronchoscope received CE certification,In August 2021, it received FDA approval and is the latest product in Boston Scientific's disposable imaging portfolio, suitable for various bronchoscopy procedures.In addition, its LithoVue™ is the first truly disposable digital flexible ureteroscope.The current product portfolio has expanded to include the EXALT duodenoscope, bronchoscope, gastroscope, and SpyGlass cholangioscope.

Endoscopic intervention is one of Boston Scientific's seven medical solutions.Since its establishment in 1986, Boston Scientific's endoscopic interventional products have been leading the innovation and development of medical technology.Minimally invasive treatment solutions with endoscopic intervention are specifically targeted at the diagnosis, palliation, and treatment of various types of digestive system diseases.Help accurately perform biopsies, stone extraction, polyp resection, drainage treatment for benign and malignant gastrointestinal strictures, endoscopic hemostasis due to ulceration or vascular rupture, palliative treatment for certain digestive system tumors, and enteral nutrition delivery.

Currently, Boston Scientific isEndoscopic product lines that have been marketed in China include ERCP catheters.(Endoscopic Retrograde Cholangiopancreatography, ERCP)Stenosis Management, Stone Management, Diagnostic EUS(Endoscopic Ultrasound, EUS),Oral Electronic Biliary and Pancreatic Endoscopy Visualization Systemetc.

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Global Endoscopy Market Continues to Grow

Promote the Expansion of Endoscopic Diagnostic and Therapeutic Consumables

According to Frost Sullivan statistics, the global endoscopic devices market size reached 20.2 billion US dollars in 2019, with a compound annual growth rate of 5.4% from 2015 to 2019.It is estimated that by 2024, the global endoscopic devices market will grow to USD 26.98 billion, with a compound annual growth rate (CAGR) of 6.0% from 2019 to 2024.

Endoscopy, as a minimally invasive surgical and interventional treatment device in the new type of medical precision diagnostic and therapeutic equipment, has a history of more than 200 years in the field of medical endoscopy. Currently, the global endoscopic diagnosis and treatment device market is experiencing steady growth with a high level of market concentration.Among them, Boston Scientific and Olympus together account for 70% of the market share, with Boston Scientific's market share reaching 36%.

It is reported that,Boston Scientific's endoscopic diagnosis and treatment device product line is comprehensive, covering basic types, EMR/ESD types, dilation types, EUS types, ERCP types, etc.Among them, ERCP devices and stents applied in the field of biliary and pancreatic diagnosis and treatment are the core products of the company's endoscopic diagnostic and therapeutic devices.In 2018, the global market size for biliary-pancreatic endoscopy devices was $1.4 billion, with Boston Scientific's market share exceeding 60% at that time.

Currently, Boston Scientific has completed the full-line layout of "disposable duodenoscope + cholangioscope + supporting diagnostic and therapeutic devices," establishing a wide moat. Leveraging disposable endoscopes,The company is expected to complete the transformation from a single endoscopic diagnosis and treatment device business to "flexible endoscopes + endoscopic diagnosis and treatment devices," ushering in broader development opportunities.

The development of endoscopic surgery has promoted the sales of endoscopic consumables.As early as 1966, Olympus began the development of endoscopic tissue biopsy, followed by the advancement of ERCP,Significantly expand the application scope of endoscopic surgery, and the subsequently developed ESD/EMR becomes the representative procedure of the third stage of endoscopic diagnosis and treatment.The development of these surgical techniques provides patients with minimally invasive, cost-effective treatments that result in a high quality of life post-prognosis, effectively replacing traditional open surgeries.The development of endoscopic surgery directly drives the expansion of varieties and the growth of sales volume of endoscopic diagnosis and treatment consumables.

Endoscopic consumables, as one of the fastest-growing sub-sectors in the global medical device industry,Boston Scientific has also long ranked among the top three in the field of endoscopic diagnosis and treatment for pancreaticobiliary diseases, gastrointestinal cancer, and gastrointestinal bleeding.So,What development will Boston Scientific Corporation encounter in the endoscopy field after completing the acquisition of Apollo Endosurgery, Inc., a manufacturer of endoscopic intraluminal consumables?Instrument之家 will continue to follow up.