In its fifth acquisition of the year, Johnson & Johnson is again tapping into the medical technology field, which has become a bigger part of its business.
The New Jersey healthcare conglomerate said Tuesday it will pay $600 million upfront for Israeli company V-Wave. J&J could potentially dish out up to $1.1 billion in backloaded payments to the heart failure company, which it has invested in since 2016.
It adds to a string of deals this year for J&J. The $13.1 billion Shockwave deal is also in the medtech space, whereas the other M&A deals — the $850 million Proteologix move, $1.25 billion Yellow Jersey purchase and its $2 billion buy for Ambrx — expanded J&J’s immunology and cancer pipelines.
Medtech is becoming a bigger piece of the J&J story after shedding its consumer health unit Kenvue and as it digests the $16.6 billion Abiomed and $400 million Laminar deals.
Medtech revenue had a bigger year-over-year jump than pharmaceutical sales for J&J in 2023, growing 10.8% versus 4.2%, respectively. Medtech comprised $30.4 billion of the company’s overall $85.1 billion in 2023 sales. But growth fell below expectations in the second quarter because of impacts to its vision portfolio and dynamics in China, executives said on the company’s earnings call last month.
Nauman ShahThe relatively small purchase price reflects the appetite signaled by J&J’s head dealmaker in a June interview with Endpoints News. The company is mainly focused on tuck-in deals, rather than overly large acquisitions, and could swoop in for assets in areas like neurology and immunology, Nauman Shah, J&J’s global head for business development, said at the time.
“In cardiovascular, we are enhancing our portfolio and shifting into higher growth markets through strategic acquisitions,” CFO Joseph Wolk told investors on last month’s earnings call.
For the heart
The move for V-Wave comes four months after the company said its interatrial shunt helped reduce adverse cardiovascular events in patients with heart failure with reduced ejection fraction, or HFrEF, in a pivotal trial. Meanwhile, heart failure patients with preserved ejection fraction, or HFpEF, had more adverse cardiovascular events with shunting.
V-Wave said the pivotal trial met the primary safety endpoint. But on overall primary effectiveness, the result was “neutral,” meaning it didn’t show benefit or harm. “Analysis of the LVEF subgroups showed this was due to directionally opposite effects in the HFrEF vs. HFpEF patients,” the company said in April.
J&J said the minimally invasive implantable device, known as Ventura, could help lower the number of cardio events and heart failure hospitalizations in patients with HFrEF, in which heart muscles can’t pump enough blood containing oxygen and nutrients.
The Israeli and California company’s implantable product could be the “first device of its kind to market” for the 800,000 patients in the US who have HFrEF every year, J&J said Tuesday, noting Ventura has FDA’s breakthrough device tag and a CE mark.
Tim Schmid“We recognize the importance of identifying more diverse and effective treatments for heart failure, and our recent track record demonstrates our focus on accelerating our impact on the most urgent and pressing unmet needs,” J&J MedTech worldwide chairman Tim Schmid said in a statement. The companies expect the deal to close by the end of this year.
During its last disclosed financing, a $98 million Series C in December 2021, V-Wave also touted the potential in pulmonary arterial hypertension.