News Feature | October 3, 2016

Japan's Terumo Makes $1.47B Offer For Abbott's Cardiovascular Biz

By Suzanne Hodsden

abbott building

Abbott Laboratories — which has been shedding and consolidating business in preparation for its acquisition of St. Jude Medical — may be looking to sell a portion of its cardiovascular business to Terumo for an estimated $1.47 billion. Sources told Nikkei Asian Review (NKA) that Abbott has put some businesses up for auction, and that Terumo has made an offer to further expand its geographic presence.

Abbott CEO Miles White told analysts in February that the company would be looking to “strengthen, not separate” its medical device business by investing in niche products and early stage companies, particularly in the structural heart and heart failure (HF) categories, citing the acquisition of Tendyne and investment in Cephea. Abbott’s $25 billion acquisition of St. Jude — the latter has been growing its portfolio of HF devices in recent years — is expected to be complete by the end of this year.

In September, Abbott announced the sale of its medical optics (AMO) business to Johnson & Johnson (J&J) for $4.3 billion. White commented that AMO is “well-positioned” to thrive at J&J, and the deal fits in with Abbott’s restructuring goals.

“We’ve been actively and strategically shaping our portfolio, which has recently focused on developing leadership positions in cardiovascular devices and expanding diagnostics,” said White.

Now, NKA is reporting that a portion of Abbott’s cardiovascular business and “other operations” may be up for sale, and that Terumo Cardiovascular Group has made an offer.  NKA did not specify which cardiovascular devices were up for sale or if other companies had made competitive bids, though they would be free to do so.

Terumo recently has been expanding its overseas presence, according to NKA. Terumo currently nets $5.2 billion in sales per year, but the company is looking to grow through strategic acquisitions and partnerships.

In 2011, Terumo entered the blood transfusion market with its $2.63 billion purchase of U.S.-based CaridianBCT, a transaction that allowed the company to expand its footprint in North American markets. In July, Terumo picked up Sequent Medical and that company’s unique aneurysm embolization technologies for $380 million, growing its presence in the neurovascular space.

In September, Terumo inked a partnership with CytoSorbents, makers of a blood purification system used for critically ill cardiac surgery patients to reduce inflammatory mediators. Under terms of the deal, Terumo will distribute CytoSorbent technology in certain European countries.

Abbott, too, has experienced strong growth in diverse spaces over the past year due to the successful launch and regulatory approval of several medical devices, including the MitraClip transcatheter mitral valve repair device, Absorb fully-dissolving heart stent, and FreeStyle Libre CGM system.