Boston Scientific to Acquire CryoCor

Boston Scientific will acquire CryoCor for $17.6 million in cash or $1.35 per share. The buyout comes after a tumultuous year for the San Diego-based company; CryoCor stock traded as high as $7.20 prior to regulatory difficulties.

CryoCor suffered a blow in June when it learned that FDA was unhappy with its pre-market approval (PMA) application for its Cryoablation System, which uses extreme cold to treat cardiac arrhythmias. It was the second time the FDA has found fault with the company’s device. In 2006, the FDA rejected the CryoCor’s PMA application, prompting the company to amend and resubmit in November 2006.

In August, CryoCor received, at last, the okay from the FDA. The Cryoablation System was approved for the treatment of right atrial flutter, a condition where the upper chambers of the heart beat too fast.

Later that month, CryoCor completed enrollment of the pivotal clinical study for using its Cryoabalation System to treat atrial fibrillation (a-fib), bringing the company one step closer to its goal of U.S. approval for both a-fib and atrial flutter.

Those efforts were likely funded, in part, by Boston Scientific who announced an atrial fibrillation collaboration with CryoCor in June. At that time, Boston purchased $2.5 million of CryoCor stock and agreed to purchase an additional $2.5 million of common stock upon successful achievement of certain milestones. Boston also agreed to pay CryoCor royalties on the sale of a-fib products developed during the collaboration.

Given the low purchase price, Boston’s acquisition is hardly surprising. Boston will receive exclusive rights to CryoCor’s intellectual property.

CyroCor’s cryoablation technology will be incorporated into Boston’s internally developed cryo-therapy balloon used in the treatment of a-fib. CryoCor’s console will deliver nitrous oxide to the balloon – the system isolates the electrical activity originating from the pulmonary veins, believed to be a source for the initiation and propagation of a-fib.

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