Bluesail Medical to Acquire 100% Equity of Swiss NVT for RMB 1.39 Billion to Enter Structural Heart Disease Therapy

On the evening of August 2, Bluesail Medical Co., Ltd. (hereinafter referred to as “Bluesail Medical,” 002382.SZ) announced its intention to acquire 100% equity interest in New Valve Technology (hereinafter referred to as “NVT”), a Swiss research, development, and manufacturing enterprise specializing in transcatheter interventional cardiac valves. The total consideration for the acquisition and subsequent capital injection amounts to RMB 1.39 billion. This acquisition will help Bluesail Medical further expand its portfolio of high-value consumables in the cardiovascular field, introducing a flagship medical device at the forefront of international technology—the Transcatheter Aortic Valve Replacement (TAVR) system—thereby propelling the company into the promising field of minimally invasive interventional therapies for structural heart disease.

TAVR: The Mainstay of Future Treatment for Aortic Valve Disease

NVT is a medical device company specializing in the field of heart valves, with its core product being the Allegra TAVR system.^™, primarily for the treatment of aortic valve stenosis.

The aortic valve is one of the four valves that regulate blood flow into and out of the heart. Located between the left ventricle and the aorta, it functions like a one-way valve: when closed, it prevents backflow of blood from the aorta into the left ventricle; when open, it facilitates the pumping of blood from the left ventricle into the aorta during cardiac contraction. If the aortic valve becomes diseased or dysfunctional, regurgitation of blood occurs, reducing the volume of blood ejected into the aorta and leading to systemic hypoperfusion. Mild cases may present with fatigue, dizziness, and palpitations, along with reduced exercise tolerance. Severe cases can progress to heart failure, syncope, cardiogenic shock, or even sudden cardiac death.

Aortic Stenosis (AS) is one of the most common valvular heart diseases worldwide, with a prevalence of approximately 7% among individuals aged 65 years and older. Once symptoms of severe aortic stenosis manifest, the average two-year survival rate is 50%, and the five-year survival rate drops to merely 20%, indicating high morbidity and mortality rates. When the disease progresses to symptomatic severe aortic stenosis, valve replacement therapy is required. With the global aging population, the number of patients afflicted with this condition is increasing sharply.

TAVR (Transcatheter Aortic Valve Replacement), or transcatheter aortic valve replacement, is a revolutionary cutting-edge technology for treating aortic valve stenosis and represents one of the most rapidly advancing frontier technologies in the field of interventional cardiology. As a minimally invasive valve replacement procedure, TAVR does not require open-heart surgery; instead, it utilizes an endovascular approach with interventional catheter techniques to deliver and deploy a prosthetic heart valve at the aortic valve site, thereby completing the valve replacement and restoring valvular function.

Prior to the advent of transcatheter aortic valve replacement (TAVR), therapeutic options for patients with aortic stenosis were limited. Surgical aortic valve replacement (SAVR) was considered the optimal treatment; however, the majority of patients faced prohibitively high surgical risks and succumbed to the disease because they could not tolerate open-chest surgery.

TAVR, as a minimally invasive interventional therapy, emerged in this century. Its safety and efficacy have been confirmed by multiple large-scale, multicenter, prospective randomized controlled trials and clinical registry studies. Compared with traditional open-chest surgical aortic valve replacement (SAVR), TAVR, as a novel procedural approach, demonstrates numerous advantages: 1) Efficacy comparable to surgical SAVR; 2) Minimally invasive nature with high safety profile and broader patient eligibility; 3) Lower procedural complexity than SAVR, facilitating wider adoption; 4) Rapid postoperative recovery, offering significant health economic benefits.

Given the significant advantages demonstrated by TAVR, coupled with the research and development upgrades of valve products and the accumulation of clinical experience among physicians, TAVR is poised to become the primary treatment modality in the future, gradually replacing SAVR as the mainstream therapeutic approach for aortic stenosis. In October 2018, the highly anticipated “Chinese Clinical Pathway for Transcatheter Aortic Valve Replacement (TAVR) 2018” was officially released, establishing a standardized framework for the development of TAVR procedures in China.

Industry Giants Enter the TAVR Market to Seek Profits, with Industry Market Space Reaching Billions

In recent years, TAVR has remained a hot topic in cardiovascular academia and investment, with its prospects generally viewed favorably. Professor Martin Leon, Chair of TCT, predicts that by 2025, the global market value of TAVR will surpass that of coronary drug-eluting stents.

Since the first TAVR procedure worldwide in 2002, more than 400,000 patients globally have undergone TAVR treatment. Throughout this period, TAVR has continuously expanded its indications due to its excellent clinical outcomes. Notably, Edwards Lifesciences’ PARTNER series of clinical trials and Medtronic’s CoreValve US, SURTAVI, and EVOLUT LOW RISK studies have progressively extended TAVR indications from high-risk patients with severe aortic stenosis to intermediate-risk and even low-risk patients. Key milestones include: FDA approval for high-risk indications in 2011; approval for intermediate-risk indications in Europe and the United States in 2017; and the publication of outstanding clinical results for low-risk indications in 2019. With the expansion of indications and maturation of technology, the volume of TAVR procedures has grown rapidly.

According to the latest data from the TVT CHICAGO conference, approximately 125,000 TAVR procedures were performed globally in 2018, with an annual growth rate exceeding 20%. In the United States and Germany, the annual volume of TAVR procedures has already surpassed that of traditional surgical interventions.

In contrast, in the field of medical devices, TAVR has become a prime market segment. Industry data shows that the global market size for TAVR products reached $3.5 billion in 2018, is projected to exceed $5 billion by 2021, and may double to $7 billion by 2024, with a compound annual growth rate (CAGR) of 12% from 2018 to 2024E. This growth rate surpasses that of most other medical device sub-sectors globally, indicating a phase of rapid expansion.

Global leaders in the medical device industry have successively made strategic moves in this field, demonstrating strong recognition of the significant market potential of TAVR products.

In 2004, Edwards Lifesciences completed the acquisition of Percutaneous Valve Technologies (PVT), an Israeli company specializing in transcatheter aortic valve technology, for $155 million. By integrating PVT’s TAVR business with its internal divisions, Edwards launched the world’s first commercialized TAVR product in Europe in 2007, thereby entering a phase of rapid growth. Over the following twelve years, Edwards Lifesciences maintained a steadfast strategic focus on the TAVR sector, investing heavily in the development of four generations of TAVR systems, which drove explosive growth in the company’s TAVR product revenue. According to Edwards Lifesciences’ annual report, TAVR products generated nearly $2.3 billion in revenue in 2018, accounting for 61.4% of the company’s total revenue. Correspondingly, the company’s stock price rose consistently alongside the success of its TAVR products, achieving a legendary tenfold increase in market capitalization over a decade.

Medtronic acquired CoreValve for $850 million in 2009, marking the starting point for the development of its TAVR business. Boston Scientific, meanwhile, expanded its European market presence by acquiring Symetis, a Swiss heart valve manufacturer, for $435 million in 2017.

Following the completion of its acquisition of NVT, Bluesail Medical will become the fifth company globally, after Edwards Lifesciences, Medtronic, Boston Scientific, and Abbott, to hold CE certification for TAVR products. Due to upcoming changes in EU CE registration regulations, it is expected that few companies, particularly Chinese enterprises, will be able to bring their TAVR products to the European market within the next two to three years. In the domestic TAVR market, currently only Venus Medtech’s and MicroPort CardioFlow’s minimally invasive TAVR products have received CFDA approval for market launch.

Although TAVR started late in China and is still in its infancy, it has developed rapidly. In China, there are approximately 2.8 million patients with severe aortic stenosis, the vast majority of whom have not yet received treatment. Since the first TAVR procedure was performed in 2010, only more than 100 hospitals in over 20 provinces and municipalities have carried out nearly 2,000 TAVR procedures. This indicates that TAVR products have enormous market potential in China.

Haitong Securities analysis indicates that the number of TAVR procedures will maintain explosive growth in the coming years. By 2025, the annual number of TAVR procedures in China is projected to reach 22,000. From 2027 to 2030, the TAVR industry is expected to enter a period of stable growth, with a compound annual growth rate (CAGR) of 26%. It is estimated that by 2030, the number of TAVR procedures performed nationwide in China will reach 113,000, driving the domestic terminal market size for TAVR valves to approximately RMB 14.7 billion. In the global market, according to estimates from the TVT Chicago conference, the number of global TAVR procedures will approach 290,000 in 2025. With global population aging and the development of the Chinese market, the ultimate global market potential for TAVR is estimated to reach USD 10–15 billion.

The continuous expansion of indications, the significant increase in the volume of TAVR procedures, and the ongoing upgrades in product technology have driven the rapid growth of the global TAVR industry. TAVR is poised to replicate the successful model of coronary stents in China, achieving high-speed development.

Renewed Push in Overseas M&A: Securing Scarce Targets at Reasonable Valuations

New Valve Technology (NVT) was founded in 2007, with its headquarters in Muri, Switzerland, and its primary operations based in Hechingen, Germany. NVT’s TAVR product, Allegra™, received CE marking in 2017 and is currently commercially available across Europe. Only four major medical device giants—Edwards, Medtronic, Boston Scientific, and Abbott—have had similar products approved for market entry in Europe, underscoring NVT’s global leadership in this technological field.

According to senior M&A professionals at international investment banks, the valuations for minority equity financing rounds of TAVR-related companies that have not yet obtained CE certification currently range between RMB 1.2 billion and RMB 3 billion. In contrast, industry giants such as Medtronic and Boston Scientific previously acquired heart valve companies at valuations as high as USD 850 million and USD 435 million, respectively. By comparison, NVT (New Valve Technology), as the only TAVR asset available for sale with CE certification in the international market, presents significant attractiveness and scarcity with its overall valuation of approximately EUR 140 million.

Note: The original text has been abridged.

Original Title: Benchmarking Edwards and Medtronic! Bluesail Medical Makes Major Acquisition of This Top-Tier Global Medical Device Company