In a major move to bolster its MedTech division, Johnson & Johnson (J&J) is set to invest around $13 billion in heart care through a deal with Shockwave Medical, a company specializing in technology that helps open clogged arteries. The health care giant announced on Friday that it will be paying $335 in cash for each share of Shockwave, with the total deal including cash already approved by both companies’ boards of directors.
Shockwave, established in 2009, focuses on intravascular lithotripsy technology, which utilizes sonic pressure waves to break up calcium lesions in arteries and restore blood flow. Similar to a technique used for breaking up kidney stones, the soundwave emitters are placed inside angioplasty catheters to target calcified areas of the artery. Shockwave’s technology is primarily used in treating coronary artery and peripheral artery disease, with the company’s revenue increasing by 49% last year to $730 million.
According to J&J Chief Financial Officer Joseph Wolk, the market for this technology is still in the early stages of scaling up, with room for growth anticipated both within and outside the United States. The company expects annual sales to surpass $1 billion. To finance the deal, J&J will be using cash on hand and debt, resulting in diluted adjusted earnings of 10 cents per share in 2025.
The acquisition of Shockwave Medical comes more than a year after J&J’s purchase of Abiomed for $16 billion, both focused on bolstering J&J’s MedTech division. The deal is pending approvals from regulators and shareholders, with the companies aiming to close the acquisition by the middle of the year. Shares of J&J rose slightly after the announcement, and Shockwave Medical Inc.’s stock also saw an increase following the news.
