FRAMINGHAM, Mass. and OR
YEHUDA, Israel, Sept. 1, 2015 /PRNewswire/ -- HeartWare
International, Inc. (Nasdaq: HTWR), a leading innovator of less
invasive, miniaturized circulatory support technologies that are
revolutionizing the treatment of advanced heart failure, announced
today that it has entered into a definitive agreement to acquire
Valtech Cardio, Ltd. ("Valtech"). Valtech is a privately held
company that specializes in the development of innovative surgical
and transcatheter valve repair and replacement devices for the
treatment of the most prevalent heart valve diseases – mitral valve
regurgitation (MR) and tricuspid valve regurgitation (TR).
The vast majority of patients with MR and TR also suffer from
advanced heart failure, and the progression of heart failure can
accelerate considerably as a result of valvular dysfunction.
Patients with advanced heart failure who receive a ventricular
assist device (VAD), like HeartWare's HVAD® System,
commonly undergo a concomitant, therapeutic mitral or tricuspid
valve procedure. This transaction provides HeartWare with a
highly complementary portfolio of technologies to broaden the
treatments it offers heart failure patients and enhance patient
outcomes.
MR is a condition in which the mitral valve leaflets fail to
close properly, allowing backflow of blood from the left ventricle
into the left atrium during systole. Left untreated, severe
MR can eventually lead to a meaningful deterioration in cardiac
function and, eventually, death. Approximately 4.2 million
patients are affected by mitral valve disease in the U.S., which
represents a several-billion-dollar market opportunity. TR is
estimated to affect 1.6 million patients in the U.S. and
complements the mitral patient population, as a significant
percentage of patients suffer from both MR and TR.
"We have been actively monitoring the mitral space for several
years, given the overlap of patient population and referral channel
with our VAD business," said Doug
Godshall, President and CEO of HeartWare. "We
identified Valtech as having the broadest, most compelling
portfolio several years ago, which led to an investment in 2013.
This investment gave us a unique opportunity to observe
Valtech's significant progress across their portfolio of valve
repair and replacement technologies. It is from this vantage
point that we have concluded that Valtech's platforms represent the
most innovative and comprehensive portfolio of interventional and
surgical products for mitral and tricuspid repair and replacement
in development today. Valtech provides HeartWare with
commercial-stage products for mitral repair, as well as a robust
technology pipeline, an advanced R&D center and an impressive,
experienced team with a proven track record. This combination
represents an attractive opportunity for value creation for
HeartWare shareholders, customers, employees and patients by
expanding HeartWare's footprint in the high-growth structural heart
market."
Since incorporation in 2005, Valtech has developed an expansive
portfolio of innovative technologies for the treatment of mitral
and tricuspid valve disease. Highlights of Valtech's product
platforms include:
- Cardioband® is the first interventional,
transfemoral, direct annuloplasty system designed for mitral and
tricuspid repair. To date, Cardioband has been used to treat more
than 50 patients and is expected to receive CE Mark approval for
mitral valve repair in 2015. Following regulatory approval,
Cardioband is expected to be commercially launched on a limited
basis in Europe in late 2015. A
U.S. Investigational Device Exemption (IDE) is planned for
submission in 2016. The first human procedures using the Cardioband
system, modified for the treatment of tricuspid valve disease, are
anticipated in late 2016.
- Cardinal™ is a differentiated, semi-rigid,
adjustable annuloplasty ring system that provides surgeons with the
ability to optimize annuloplasty results by enabling fine-tuning of
the ring diameter and leaflet coaptation on a beating heart under
real-time echocardiographic guidance. To date, Cardinal has been
used to treat more than 75 patients globally. Already CE
Mark-approved for mitral repair, production scaling will drive an
anticipated commercial launch in 2016 for mitral repair, followed
by tricuspid repair in 2017.
- CardioValve™ is a transseptally delivered,
low-profile, transcatheter mitral valve replacement (TMVR) system
with five degrees of steering maneuverability. The CardioValve
platform has an orientation-indifferent structure for reduced
implant complexity, was designed from inception to enable
transseptal delivery, and can also be delivered transapically.
CardioValve is currently being tested in chronic animal studies and
is anticipated for human clinical studies in early 2017.
- V-Chordal® is a surgical and
interventional chord replacement system for MR repair.
V-Chordal, which has been successfully evaluated in a first-in-man
clinical trial, is expected to expand the range of percutaneous
solutions offered for treating degenerative mitral valve
pathologies and allow more patients to be treated without the risk
of open-heart surgery. The timing for a CE Mark study is
being evaluated in relation to the commencement of multiple other
Valtech trials.
"Valtech's robust portfolio of repair and replacement
technologies provides us with the most comprehensive product suite
to treat the mitral and tricuspid populations. We believe it
will be critical to offer patients and physicians a multifaceted
approach in the treatment of MR and TR, with both repair and
replacement options," added Mr. Godshall. "The mitral repair
market is already a well-established and rapidly growing market
with a significant, unmet, immediate clinical need. The
Cardioband transfemoral annuloplasty system represents a more
reproducible and predictable platform for mitral valve repair than
existing solutions. We believe Cardioband will be a natural
and clear selection as a first-line treatment for the broadest
spectrum of MR patients, since it offers a safer option and, even
in early clinical use, has already demonstrated a strong efficacy
profile."
"Valtech has benefited significantly from HeartWare's early
investment in our company. Since then, we have developed a
strong relationship based on a shared mission to deliver
transformative products to patients with advanced heart failure and
degenerative heart conditions," said Amir
Gross, Founder and CEO of Valtech. "By joining
HeartWare, we can more quickly and fully realize the potential of
our pipeline technologies and further influence the underpenetrated
markets that we serve. HeartWare's existing market
development experience and commercial infrastructure provide a
compelling platform from which to launch multiple products
worldwide, including a near-term launch of Cardioband in
international markets following anticipated CE Mark approval this
year. Together, we can offer clinical heart failure teams a
compelling portfolio of surgical and interventional technologies to
serve the advanced heart failure population."
Strategic and Financial Benefits of the Transaction
- Significant Market Expansion Opportunity – By expanding
its footprint into the high-growth structural heart market,
HeartWare establishes itself as one of the most broadly equipped
leaders in the treatment of patients with advanced heart failure.
This acquisition provides HeartWare with multiple, innovative, new,
commercial opportunities in the significantly underserved areas of
mitral and tricuspid valve diseases, from which many VAD patients
today also suffer.
- Comprehensive Technology Portfolio – Valtech's pipeline
offers a comprehensive product portfolio of progressive
technologies across four platforms, including two near-term
commercial-stage products. The acquisition accelerates and expands
HeartWare's ability to deliver transformative technologies to
patients and customers with a range of innovative VAD and valve
therapies, leveraging the clinical overlap of the heart teams
performing these procedures.
- Commitment to Improving Patient Outcomes – Valtech has
developed repair and replacement technologies that can be delivered
via the transseptal approach, which offers a safer, less-invasive
delivery method for patients. Valtech's product platforms align
with HeartWare's strategic objective of delivering transformative,
less-invasive therapies for patients with chronic heart
failure.
- Innovative and Experienced Team – The strength of
HeartWare's existing leadership team and commercial, manufacturing
and development organizations, coupled with Valtech's experienced
and inventive R&D team, creates a world-class organization of
experts well-suited to develop and commercialize breakthrough
technologies for advanced heart failure patients. HeartWare plans
to lead the commercialization of the Valtech product portfolio,
while maintaining Valtech as a separate business unit.
- Enhanced Platform for Growth – The combined portfolio
provides HeartWare with leading technologies in two of the
highest-growth markets in heart failure today. We believe this
portfolio positions HeartWare to deliver accelerated revenue growth
and attractive shareholder returns over time.
Terms of the Agreement
According to the terms of the
agreement, Valtech shareholders will receive an up-front
consideration of 4.4 million shares of HeartWare common stock;
800,000 shares of HeartWare common stock, contingent upon CE Mark
approval for Cardioband; and 700,000 shares of HeartWare common
stock upon the earlier of first-in-man implants for either
Cardioband tricuspid or CardioValve. The transaction also includes
warrants to purchase 850,000 shares of HeartWare common stock at an
exercise price of $83.73 per share
(based on a volume weighted average price of HeartWare shares)
exercisable upon attainment of $75
million in net sales (trailing 12 months) of Valtech
products, and an earn-out payment of $375
million (payable in cash or stock, at the discretion of
HeartWare), upon attainment of $450
million of net sales (trailing 12 months) of Valtech
products.
This transaction was approved by the Boards of Directors of
HeartWare and Valtech, with holders of more than 70% of Valtech's
shares having signed support agreements committing to the
transaction. The transaction is subject to regulatory
approvals, as well as HeartWare stockholder and Valtech shareholder
approvals. The closing of the transaction is expected in late
2015.
Perella Weinberg Partners is acting as financial advisor to
HeartWare, and Canaccord Genuity Inc. provided a fairness opinion
to the Board of Directors of HeartWare in connection with the
transaction.
Investor and Analyst Conference Call and
Webcast
HeartWare will hold a conference call to discuss the
transaction on Sept. 1, 2015 at
5:00 p.m. EDT. The conference
call may be accessed by dialing 1-877-407-0789 five minutes prior
to the scheduled start time and referencing "HeartWare." For
callers outside the U.S., please dial +1 (201) 689-8562. A
slide presentation to accompany commentary may be accessed in the
Investors section of HeartWare's website at
http://ir.heartware.com.
A live webcast of the call may be accessed in the Investors
section of HeartWare's website at http://ir.heartware.com. A
replay of the webcast will be available through the same link above
immediately following completion of the call.
About Valtech Cardio
Valtech Cardio, Ltd., founded in
2005, is a privately held company specializing in the development
of devices for mitral and tricuspid valve repair and replacement.
Valtech Cardio has full, in-house development, manufacturing, and
clinical research capabilities, and over 130 patents and patent
applications. The company, comprised of multidisciplinary
development teams, works in close collaboration with world-renowned
heart specialists to provide the best possible therapy for mitral
patients. Valtech Cardio is headquartered in Or Yehuda,
Israel. For more information, visit the company's website:
www.valtechcardio.com.
About HeartWare International
HeartWare International,
Inc. develops and manufactures miniaturized implantable heart
pumps, or ventricular assist devices, to treat patients suffering
from advanced heart failure. The HeartWare® Ventricular
Assist System features the HVAD® pump, a small
full-support circulatory assist device designed to be implanted
next to the heart, avoiding the abdominal surgery generally
required to implant competing devices. The HeartWare HVAD System is
approved in the United States for
the intended use as a bridge to cardiac transplantation in patients
who are at risk of death from refractory end-stage left ventricular
heart failure, has received CE Marking in the European Union and
has been used to treat patients in 46 countries. The device is also
currently the subject of a U.S. clinical trial for destination
therapy. For additional information, please visit
www.heartware.com.
HeartWare International, Inc. is a member of the Russell
2000®, and its securities are publicly traded on The
NASDAQ Stock Market.
Participants in the Solicitation
HeartWare, Valtech
and their respective directors, executive officers, certain members
of management and certain employees may be deemed to be
participants in the solicitation of proxies in connection with the
proposed transaction. A description of the interests in HeartWare
of its directors and executive officers is set forth in HeartWare's
proxy statement for its 2015 Annual Meeting of Shareholders, which
was filed with the Securities and Exchange Commission (the "SEC")
on April 30, 2015. This document is
available free of charge at the SEC's website at www.sec.gov or by
going to HeartWare's Investors page on its corporate website at
www.heartware.com. Additional information regarding the
persons who may, under the rules of the SEC, be deemed participants
in the solicitation of proxies in connection with the proposed
transaction, and a description of their direct and indirect
interests in the proposed transaction, which may differ from the
interests of HeartWare stockholders or Valtech shareholders
generally, will be set forth in a proxy statement/prospectus when
it is filed with the SEC.
Additional Information and Where You Can Find It
A new
holding company will file a Registration Statement on Form S-4
containing a joint proxy statement/prospectus and other documents
concerning the proposed transaction with the SEC. Investors are
urged to read the joint proxy statement/prospectus when it becomes
available and other relevant documents filed with the SEC because
they will contain important information. Security holders may
obtain a free copy of the proxy statement/prospectus (when it is
available) and other documents filed by HeartWare and the new
holding company with the SEC on the SEC's website at www.sec.gov.
The joint proxy statement/prospectus and other documents may also
be obtained for free by contacting HeartWare Investor Relations by
e-mail at investors@heartware.com or by telephone at +1 (508)
739-0864.
Forward-Looking Statements
This announcement contains forward-looking statements that are
based on management's beliefs, assumptions and expectations and on
information currently available to management. All statements that
address operating performance, events or developments that we
expect or anticipate will occur in the future are forward-looking
statements, including without limitation our expectations with
respect to the: commercialization of HeartWare and Valtech
products; timing, progress and outcomes of clinical trials and
regulatory approvals; research and development activities; our
ability to integrate, manage and take advantage of acquired and
pipeline technology; and the costs and benefits to be achieved from
the Valtech transaction. Management believes that these
forward-looking statements are reasonable as and when made.
However, you should not place undue reliance on forward-looking
statements because they speak only as of the date when made.
HeartWare does not assume any obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by federal securities laws and the rules and regulations of the
SEC. HeartWare may not actually achieve the plans, projections or
expectations disclosed in forward-looking statements, and actual
results, developments or events could differ materially from those
disclosed in the forward-looking statements. Forward-looking
statements are subject to a number of risks and uncertainties,
including without limitation those described in Part I, Item 1A
"Risk Factors" in HeartWare's Annual Report on Form 10-K filed with
the SEC. HeartWare may update risk factors from time to time in
Part II, Item 1A "Risk Factors" in Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, or other filings with the SEC.
HEARTWARE, HVAD, MVAD, PAL, SYNERGY, CIRCULITE and HeartWare
logos are trademarks of HeartWare, Inc. or its affiliates.
VALTECH, CARDIOBAND, CARDINAL, CARDIOVALVE, V-CHORDAL and
Valtech logos are trademarks of Valtech Cardio, Ltd.
For additional information:
Christopher Taylor
HeartWare International, Inc.
Email: ctaylor@heartware.com
Phone: +1 (508) 739 0864
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SOURCE HeartWare International, Inc.