Boston Scientific Corporation (BSX) last week announced that it had entered into a definitive agreement to acquire Advanced Stent Technologies Inc. (AST) of Pleasanton, California. The transaction is expected to close early next year.
Terms of the agreement were not disclosed, but sources inform "Globes" that its value will be up to $500 million, should certain milestones be met. "Globes" has also learned that other companies recently tried to acquire AST, including Johnson & Johnson, which last week announced that it was acquiring stent manufacturer Guidant Corp. In late 2001, AST negotiated with Israel's Medinol, but the talks failed.
AST was co-founded in 1996 by Chicago bonds trader Yosi Morik, Dr. Charles J. Davidson MD, and Dr. Gil Vardi MD. The company was based on technology developed by Davidson and Vardi. Morik provided seed capital for the company along with two other early investors, Chromatis founder Rafi Gidron and Efi Gildor. Brothers Harris Brumfield and Hardy Brumfield, bond market makers in Chicago, provided the bulk of AST's investment capital.
In all, the company is believed to have raised about $50 million. The Brumfield family's stake is believed to be about 80%.
Morik resigned from the company in early 2003, and no longer plays an active role at AST. Vardi left a short time later. The company's current president and CEO is another Brumfield brother, Bruce Jay Brumfield Jr., who serves together with Davidson on AST's board of directors.
Since its founding, AST has been developing stent and stent delivery systems specifically designed to address the unique anatomical needs of coronary artery disease in bifurcated vessels.
A significant percentage of coronary artery disease -- as much as 30% -- occurs when a single vessel branches (bifurcates) into two vessels. Bifurcations have been difficult to treat with conventional stents, since those stents are designed to support a single cylinder, not a cylinder with an offshoot in the middle. Historically, the outcomes for treating bifurcations -- with bare-metal and drug-eluting stents -- have been less successful than those for standard lesions.
AST has experimented with several different stent designs and over time developed a design called the Petal. This design incorporates stent features at both ends with the Petal feature in the middle. The Petal bifurcation stent is designed to expand into the side branch, permitting blood to flow into both branches of the bifurcation and providing support at the branch.
Boston Scientific stated that combined with its paclitaxel-eluting stent technology (the TAXUS paclitaxel-eluting coronary stent system), the Petal device will also deliver drugs to the bifurcated vessel.
Boston Scientific and Medinol were recently engaged in a lawsuit about intellectual property claims relating to the TAXUS system. Published by Globes [online], Israel business news - www.globes.co.il - on Sunday, December 20, 2004