Analyst: Boston Scientific could be eyeing a Neovasc buyout

Boston Scientific (NYSE:BSX) is a potential acquirer for mitral valve maker Neovasc (NSDQ:NVCN), according to JMP Securities analyst John Gillings, after agreeing to a $435 million deal for aortic valve maker Symetis that doesn’t include its Middle Peak Medical mitral valve assets.

Although the all-cash Symetis deal adds the market-ready Acurate transcatheter aortic valve implant to Boston Scientific’s structural heart portfolio, interventional cardiology president Kevin Ballinger told analysts during a conference call that the Middle Peak assets don’t fit in with its other programs.

“We currently have other investments in the mitral field,” Ballinger said. “We’re comfortable with other investment areas we have and Middle Peak won’t be part of the process here.”

Citing that comment, the 15% stake Boston already owns in Neovasc and its apparent disinterest in the piece it owns of MValve, Gillings said he wouldn’t be surprised to see the Marlborough, Mass.-based company buy up a bigger share of Neovasc – or purchase it outright.

“We believe the most likely meaning to be taken from this comment is the 15% stake it holds in NVCN,” Gillings said. “These comments, along with BSX’s strategy to be a leading player in structural heart, gives us incremental confidence that NVCN would be an ideal fit for BSX and we would not be surprised to see further investment and, potentially, an acquisition at some point in the future, perhaps tied to milestones such as clarity around the appeals process or progress toward or receipt of CE Mark.”

Marlborough, Mass.-based Boston Scientific closed the $75 million deal with Neovasc (NSDQ:NVCN) in December, acquiring that company’s advanced biological tissue business and a 15% equity stake. The company also owns a piece of another mitral valve developer, MValve.

Boston Scientific said the Acurate transcatheter aortic valve implant developed by Symetis would complement its own Lotus TAVI program, which is under a voluntary recall while Boston addresses issues with its locking mechanism. (The Lotus platform is expected to return to market in the 4th quarter.) Symetis won CE Mark approval for the Acurate Neo device in 2014 and is running a clinical trial for the next-generation Acurate Neo/AS TAVI ahead of a bid for EU approval.

Boston Scientific said it expects the deal, slated to close during the 2nd quarter, to be “immaterial” to adjusted earnings per share this year but “slightly accretive” in 2018 and “increasingly accretive” after that.

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