Merit Medical Acquires Cianna Medical for $200M to Expand Breast Cancer Portfolio with Savi Scout Wireless Localization System

VCBeat (WeChat ID: vcbeat) has learned that on November 13, 2018, U.S. local time, Merit Medical (NASDAQ: MMSI; hereinafter referred to as “Merit”), a leading healthcare company, announced the completion of its acquisition of Cianna Medical for $200 million. This acquisition makes Cianna Medical a wholly owned subsidiary of Merit.

Under the agreement, the transaction includes a $135 million upfront cash payment, up to $15 million in potential earn-out payments tied to supply chain metrics, and $50 million in sales milestones.

Cianna Medical is a women’s health company dedicated to the treatment of early-stage breast cancer. It has developed the Savi Scout wireless breast tumor localization system, the world’s first non-radioactive wireless solution for breast tumor localization and the only one that employs radar technology within human tissue.

This technology is designed to assist surgeons in locating target tissue during breast tumor lumpectomies with a precision of ±1 mm. It disrupts the traditional wire-localization method, which involves inserting a guidewire into the female breast, by instead implanting a rice-grain-sized radar reflector into the breast to achieve high-precision targeting of cancerous tissue. This approach reduces patient discomfort and anxiety during surgery and mitigates the risks associated with potential wire displacement in conventional localization techniques, such as the need for re-excision and compromised cosmetic outcomes.

Image source: Cianna official website

This technology received U.S. FDA 510(k) clearance in 2014, addressing unmet needs in radiation therapy, tumor localization, and surgical guidance.

Fred Lampropoulos, President and Chief Executive Officer of Merit, stated: “We are delighted to welcome Cianna Medical into the Merit family. We look forward to sustaining Cianna’s growth momentum, integrating with its domestic sales and marketing team, and helping to expand its international market presence.”

Fred Lampropoulos also stated that they plan to largely retain Cianna’s existing business model and R&D team, while providing logistical support and clinical assistance as Cianna enters new markets.

Merit Medical’s stock surged nearly 44.7% over the past year, outpacing the industry’s 1.6% growth rate and the S&P 500’s 8.2% gain. Analysts believe that this Zacks Rank #2 (Buy) company has been leveraging bolt-on acquisitions to drive inorganic growth. According to Merit’s third-quarter financial report released at the end of last month, both sales and earnings for the quarter exceeded expectations.

It is reported that Piper Jaffray & Co. and Raymond James & Associates served as financial advisors to Merit, while JP Morgan Securities LLC served as the financial advisor to Cianna Medical. They expect that the acquisition will have no impact on the earnings per share of Merit’s common stock during the 2018–2019 period.

Merit Medical (NASDAQ: MMSI), founded in 1987 and headquartered in Utah, USA, is a leading manufacturer and marketer of single-use medical devices, primarily focused on interventional, diagnostic, and therapeutic procedures in cardiology, radiology, oncology, and other fields.

Cianna Medical, headquartered in California, USA, is a women’s health company dedicated to innovative treatments for early-stage breast cancer. The company has developed advanced solutions for breast tumor localization, surgical guidance, and targeted radiation therapy. To date, Cianna Medical has raised a total of $53 million across seven funding rounds.