Boston Scientific to Acquire Relievant Medsystems for $850 Million

Boston Scientific Corp. announced yesterday that it has reached an agreement to acquire Relievant Medsystems Inc., a privately held medical tech company specializing in the treatment of chronic low back pain. Under the terms of the deal, Boston Scientific will make an upfront payment of $850 million, with additional contingent payments based on achieving specific sales targets over the next three years.

Relievant has developed an innovative solution known as the Intracept (R) Intraosseous Nerve Ablation System, which has received approval from the U.S. Food and Drug Administration for the treatment of vertebrogenic pain. Unlike other treatments available, this therapy utilizes targeted radiofrequency energy to block the transmission of pain signals from the basivertebral nerve to the brain. The ultimate goal of this treatment is to enhance functionality and provide long-lasting relief to patients.

Currently, approximately 5.3 million individuals in the United States suffer from vertebrogenic pain. With this acquisition, Boston Scientific aims to address this widespread issue and significantly expand its reach in the medical technology industry. The transaction is expected to close in the first half of 2024.

Financially, the deal is projected to generate sales exceeding $70 million in 2023, with a growth rate surpassing 50% in 2024. Although the acquisition is not anticipated to have a significant impact on adjusted per-share earnings in 2024, it is expected to be slightly accretive in 2025 and progressively accretive thereafter.

Boston Scientific's stock saw a premarket increase of 0.9% following the announcement, and it has seen a year-to-date gain of 14.6%. Meanwhile, the S&P 500 index has experienced a 16% gain in the same period.