Enhances Johnson & Johnson’s Ability to
Transform the Treatment Landscape for Cardiovascular Disease and
Continue to Improve Patient Outcomes
Extends Johnson & Johnson MedTech’s
Position in Highest-Growth, Innovation-Oriented Segments of
Cardiovascular Intervention
Accelerates Sales Growth and Accretive to
Operating Margin for Both Johnson & Johnson and Johnson &
Johnson MedTech
Conference Call at 8:30 a.m. ET To Discuss
Details of the Transaction
Johnson & Johnson (NYSE: JNJ) and Shockwave Medical, Inc.
(Nasdaq: SWAV) (“Shockwave”) today announced that they have entered
into a definitive agreement under which Johnson & Johnson will
acquire all outstanding shares of Shockwave for $335.00 per share
in cash, corresponding to an enterprise value of approximately
$13.1 billion including cash acquired. The transaction was approved
by both companies’ boards of directors.
The acquisition of Shockwave further extends Johnson &
Johnson MedTech’s position in cardiovascular intervention and
accelerates its shift into higher-growth markets. Cardiovascular
intervention is one of the fastest-growing global medtech markets,
with significant unmet patient need. With the addition of
Shockwave, Johnson & Johnson will expand its MedTech
cardiovascular portfolio into two of the highest-growth,
innovation-oriented segments of cardiovascular intervention –
coronary artery disease (CAD) and peripheral artery disease (PAD).
The transaction follows Johnson & Johnson MedTech’s successful
acquisitions of Abiomed, a leader in heart recovery, and more
recently Laminar, an innovator in left atrial appendage elimination
for patients with non-valvular atrial fibrillation (AFib). These
acquisitions complement and build on Johnson & Johnson’s
established global leadership position in electrophysiology through
the Biosense Webster portfolio. Following the close of the
transaction, Johnson & Johnson MedTech will be a category
leader in four high-growth cardiovascular segments.
Shockwave is a leading, first-to-market provider of innovative
intravascular lithotripsy (IVL) technology for the treatment of
calcified CAD and PAD. IVL is a minimally invasive, catheter-based
treatment for calcified arterial lesions, which can reduce blood
flow and cause pain or heart attack. IVL helps restore blood flow
by cracking calcium lesions using sonic pressure waves and is used
in both CAD and PAD, often in combination with stenting. Shockwave
offers the only commercially available IVL technology and has
safely, simply, and effectively treated approximately 400,000
patients globally. In addition to its leading IVL platform,
Shockwave also recently acquired Neovasc Inc., a company that has
developed the Reducer System, a novel product focused on symptom
relief of refractory angina. The Reducer System has a growing
commercial presence. It is currently undergoing clinical studies in
the U.S. and is CE marked in the European Union and the United
Kingdom.
Joaquin Duato, Chairman and Chief Executive Officer of Johnson
& Johnson, said, “With our focus on Innovative Medicine and
MedTech, Johnson & Johnson has a long history of tackling
cardiovascular disease – the leading cause of death globally. The
acquisition of Shockwave and its leading IVL technology provides a
unique opportunity to accelerate our impact in cardiovascular
intervention and drive greater value for patients, shareholders and
health systems.”
Tim Schmid, Executive Vice President and Worldwide Chairman of
Johnson & Johnson MedTech, said, “Shockwave offers a truly
differentiated opportunity to further enhance our leadership
position in medtech, expand into additional high-growth segments,
and ultimately transform the future of cardiovascular treatment.
Shockwave’s IVL technology for treating CAD and PAD, and its strong
pipeline, are in a class of their own. We look forward to bringing
Shockwave’s solutions into Johnson & Johnson MedTech and the
hands of more physicians around the world.”
“Shockwave has transformed the treatment of complex calcified
arterial disease through the pioneering development of
intravascular lithotripsy, and it is our mission to make this
remarkable technology available to patients worldwide,” said Doug
Godshall, President and CEO of Shockwave. “As part of a larger,
more diverse organization, with broad expertise and a core focus on
improving patient outcomes, we are confident we will be able to
further solidify IVL as the global standard of care for patients. I
am deeply grateful to our team members and colleagues whose efforts
have made today’s milestone possible; their accomplishments and
passion have been extraordinary. I could not think of a better
partner and home than Johnson & Johnson as the Shockwave team
prepares to write its next exciting chapter.”
Transaction Benefits
- Solidifies Johnson & Johnson MedTech’s leadership in
cardiovascular intervention: IVL is the only technology that
can treat both intimal and medial calcification, and Shockwave
offers the first and only commercially available IVL platform for
CAD and PAD. This acquisition will complement Johnson & Johnson
MedTech’s leadership positions in heart recovery (Abiomed) and
electrophysiology (Biosense Webster) to make it a category leader
in four of the largest and highest-growth medtech markets within
cardiovascular intervention.
- Enhances opportunity to serve patients worldwide through
complementary fit with Johnson & Johnson: Shockwave’s IVL
and Abiomed’s Impella® heart pump platform play a critical role in
complex percutaneous coronary intervention (PCI) procedures.
Specifically, IVL is used in approximately 30% of high-risk PCI
cases that also use Impella® today. This clinical compatibility,
combined with Johnson & Johnson MedTech’s established global
commercial infrastructure, provides numerous opportunities to
accelerate the adoption of these segment-leading technologies to
patients in need.
- Provides robust pipeline for future growth in
underpenetrated markets: Shockwave benefits from a strong
pipeline focused on continued innovation and expansion of its
product portfolio in CAD and PAD, and the potential use of IVL in
new indications, including carotid artery disease and structural
heart disease, over the coming years. Shockwave is also evaluating
its Reducer System technology in clinical studies to treat patients
with refractory angina.
- Accelerates sales growth: The acquisition of Shockwave
accelerates Johnson & Johnson MedTech’s ongoing efforts to
increase its presence in high-growth markets with unmet need, while
expanding its reach and scale globally. The proposed transaction
adds a high-performing business in an underpenetrated category with
a strong pipeline and an attractive growth and margin profile. The
transaction is expected to accelerate revenue growth for both
Johnson & Johnson and Johnson & Johnson MedTech. Shockwave
is ultimately expected to become Johnson & Johnson MedTech’s
thirteenth priority platform, as defined by annual sales of at
least $1 billion.
- Delivers immediate operational accretion: The
transaction will be accretive to operating margin for both Johnson
& Johnson and Johnson & Johnson MedTech. Johnson &
Johnson expects the transaction to be operationally accretive upon
closing, but considering the impact of financing costs, is expected
to dilute adjusted earnings per share by approximately $0.10 in
2024 and approximately $0.17 in 2025.
Transaction Details and Path to Completion
Under the terms of the agreement, Johnson & Johnson will
acquire all outstanding shares of Shockwave for $335.00 per share
in cash through a merger of Shockwave with a wholly owned Johnson
& Johnson subsidiary. Johnson & Johnson expects to fund the
transaction through a combination of cash on hand and debt.
Johnson & Johnson expects to maintain a strong balance sheet
and to continue to support its stated capital allocation priorities
of R&D investment, competitive dividends, value-creating
acquisitions and strategic share repurchases.
Following the completion of the transaction, Shockwave will
operate as a business unit within Johnson & Johnson MedTech,
and financials will be reported within Johnson & Johnson
MedTech’s Cardiovascular portfolio, which was previously referred
to as Interventional Solutions. In addition to his current
responsibilities for Abiomed as the Global Head of Heart Recovery,
Michael Bodner will assume responsibility for the business upon
close. Isaac Zacharias, who has 6 years with Shockwave, most
recently serving as President and Chief Commercial Officer, will
transition to become Worldwide President of Shockwave, reporting to
Michael Bodner. Doug Godshall, Shockwave’s President and Chief
Executive Officer, will advise through the transition.
The closing of the transaction is expected to occur by mid-year
2024 subject to the receipt of Shockwave’s shareholder approval, as
well as the receipt of applicable regulatory approvals and other
customary closing conditions. Following completion of the
transaction, Shockwave’s common stock will no longer be listed for
trading on the Nasdaq Global Select Market.
Investor Conference Call
Johnson & Johnson and Shockwave will conduct a conference
call with investors to discuss the transaction today, April 5,
2024, at 8:30 a.m. ET.
Participant Dial-In: 877-869-3847
Webcast:
https://event.webcasts.com/starthere.jsp?ei=1664558&tp_key=36372427f7
A simultaneous webcast of the call for investors and other
interested parties may be accessed by utilizing the link provided
above. A replay will be available approximately two hours after the
live webcast by visiting www.investor.jnj.com or
https://ir.shockwavemedical.com.
As previously announced, Johnson & Johnson will also host a
conference call for investors at 8:30 a.m. ET on Tuesday, April
16th to review first-quarter results.
In light of the joint conference call today, Shockwave has
cancelled its conference call to discuss its financial results for
the first quarter of fiscal year 2024, previously scheduled for May
6, 2024, 4:30 EST.
Advisors
J.P. Morgan Securities LLC is serving as financial advisor to
Johnson & Johnson and Freshfields Bruckhaus Deringer LLP is
serving as legal advisor.
Perella Weinberg Partners is serving as financial advisor to
Shockwave and Fenwick & West LLP is serving as legal
advisor.
About Johnson & Johnson
At Johnson & Johnson, we believe health is everything. Our
strength in healthcare innovation empowers us to build a world
where complex diseases are prevented, treated, and cured, where
treatments are smarter and less invasive, and solutions are
personal. Through our expertise in Innovative Medicine and MedTech,
we are uniquely positioned to innovate across the full spectrum of
healthcare solutions today to deliver the breakthroughs of
tomorrow, and profoundly impact health for humanity. Learn more at
https://www.jnj.com/.
About Shockwave Medical, Inc.
Shockwave Medical is a leader in the development and
commercialization of innovative products that are transforming the
treatment of cardiovascular disease. Its first-of-its-kind
Intravascular Lithotripsy (IVL) technology has transformed the
treatment of atherosclerotic cardiovascular disease by safely using
sonic pressure waves to disrupt challenging calcified plaque,
resulting in significantly improved patient outcomes. Shockwave has
also recently acquired the Reducer, which is under clinical
investigation in the United States and is CE Marked in Europe. By
redistributing blood flow within the heart, the Reducer is designed
to provide relief to the millions of patients worldwide suffering
from refractory angina. Learn more at www.shockwavemedical.com.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of Shockwave Medical by Johnson
& Johnson.
In connection with the proposed transaction, Shockwave intends
to file relevant materials with the U.S. Securities and Exchange
Commission (“SEC”), including Shockwave’s proxy statement in
preliminary and definitive form. Promptly after filing the
definitive proxy statement, Shockwave will mail the definitive
proxy statement and a proxy card to the security holders of
Shockwave.
INVESTORS AND SECURITY HOLDERS OF SHOCKWAVE ARE URGED TO READ
ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING SHOCKWAVE’S
PROXY STATEMENT (WHEN THEY ARE AVAILABLE), BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION
AND THE PARTIES TO THE PROPOSED TRANSACTION.
Investors and security holders of Shockwave are or will be able
to obtain these documents (when they are available) free of charge
from the SEC’s website at www.sec.gov or free of charge from
Shockwave on Shockwave’s website at
www.ir.shockwavemedical.com/.
Participants in the Solicitation
Johnson & Johnson and Shockwave and certain of their
respective directors and executive officers, under SEC rules, may
be deemed to be “participants” in the solicitation of proxies from
security holders of Shockwave in connection with the proposed
transaction. Information about Johnson & Johnson’s directors
and executive officers is set forth in Johnson & Johnson’s
Proxy Statement on Schedule 14A for its 2024 Annual Meeting of
Shareholders, which was filed with the SEC on March 13, 2024, and
Johnson & Johnson’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2023, which was filed with the SEC on
February 16, 2024. Information about Shockwave’s directors and
executive officers is set forth in Shockwave’s Proxy Statement on
Schedule 14A for its 2023 Annual Meeting of Stockholders, which was
filed with the SEC on April 21, 2023, and Shockwave’s Current
Report on Form 8-K filed with the SEC on January 29, 2024. To the
extent holdings of Johnson & Johnson’s or Shockwave’s
securities by their respective directors or executive officers have
changed since the amounts set forth in such 2024 or 2023 proxy
statements, such changes have been or will be reflected on Initial
Statements of Beneficial Ownership on Form 3 or Statements of
Change in Ownership on Form 4 filed with the SEC. Investors and
security holders of Shockwave are or will be able to obtain these
documents free of charge from the SEC’s website at www.sec.gov,
from Johnson & Johnson on Johnson & Johnson’s website at
www.jnj.com, from Shockwave on Shockwave’s website at
www.shockwavemedical.com/ or on request from Johnson & Johnson
or Shockwave. Additional information concerning the interests of
Shockwave’s participants in the solicitation, which may, in some
cases, be different than those of Shockwave’s security holders
generally, will be set forth in Shockwave’s proxy statement
relating to the proposed transaction when it becomes available.
Cautions Concerning Forward-Looking Statements
- This communication contains “forward-looking statements”
regarding the acquisition of Shockwave by Johnson &
Johnson.
- The reader is cautioned not to rely on these forward-looking
statements. These statements are based on current expectations of
future events.
- If underlying assumptions prove inaccurate or known or unknown
risks or uncertainties materialize, actual results could vary
materially from the expectations and projections of Johnson &
Johnson or Shockwave. Risks and uncertainties include, but are not
limited to: the risk that the closing conditions for the
acquisition will not be satisfied, including the risk that
clearance under the Hart-Scott-Rodino Antitrust Improvements Act or
other applicable antitrust laws will not be obtained; uncertainty
as to the percentage of Shockwave security holders that will vote
to approve the proposed transaction at the Shockwave stockholder
meeting; the possibility that the transaction will not be completed
in the expected timeframe or at all; potential adverse effects to
the businesses of Johnson & Johnson or Shockwave during the
pendency of the transaction, such as employee departures or
distraction of management from business operations; the risk of
security holder litigation relating to the transaction, including
resulting expense or delay; the potential that the expected
benefits and opportunities of the acquisition, if completed, may
not be realized or may take longer to realize than expected;
challenges inherent in product research and development, including
uncertainty of clinical success and obtaining regulatory approvals;
uncertainty of commercial success for new products; manufacturing
difficulties and delays; product efficacy or safety concerns
resulting in product recalls or regulatory action; economic
conditions, including currency exchange and interest rate
fluctuations; the risks associated with global operations;
competition, including technological advances, new products and
patents attained by competitors; challenges to patents; changes to
applicable laws and regulations, including tax laws and global
health care reforms; adverse litigation or government action;
changes in behavior and spending patterns or financial distress of
purchasers of health care services and products; and trends toward
health care cost containment.
- In addition, there will be risks and uncertainties related to
the ability of the Johnson & Johnson family of companies to
successfully integrate the programs, products, technologies and
employees/operations and clinical work of Shockwave. A further list
and description of these risks, uncertainties and other factors and
the general risks associated with the respective businesses of
Johnson & Johnson and Shockwave can be found in Johnson &
Johnson’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, filed with the SEC on February 16, 2024,
including in the sections captioned “Cautionary Note Regarding
Forward-Looking Statements” and “Item 1A. Risk Factors,” in Johnson
& Johnson’s most recently filed Quarterly Report on Form 10-Q,
in Johnson & Johnson’s subsequent filings with the SEC and in
Shockwave’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, filed with the SEC on February 26, 2024,
including in the sections captioned “Special Note Regarding
Forward-Looking Statements” and “Item 1A. Risk Factors,” and in
Shockwave’s subsequent filings with the SEC. Copies of these
filings, as well as subsequent filings, are available online at
www.sec.gov, www.jnj.com, www.shockwavemedical.com/ or on request
from Johnson & Johnson or Shockwave. Neither Johnson &
Johnson nor Shockwave undertakes to update any forward-looking
statement as a result of new information or future events or
developments, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240405052557/en/
Johnson & Johnson
Media: Ryan Carbain
media-relations@its.jnj.com
Investor: Tracy Menkowski
investor-relations@its.jnj.com
Shockwave Medical
Media: Scott Shadiow +1.317.432.9210
sshadiow@shockwavemedical.com
Investor: Debbie Kaster dkaster@shockwavemedical.com
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