By Jof Enriquez,
Follow me on Twitter @jofenriq
St. Jude Medical recently exercised its option to acquire Spinal Modulation Inc. for approximately $175 million in a deal that is expected to close in the second quarter of 2015. The acquisition includes Spinal Modulation's Axium Neurostimulator System, which stimulates the dorsal root ganglion (DRG) to treat intractable pain.
In a series of deals made in 2013, St. Jude acquired the exclusive right to purchase Spinal Modulation after it made a $40 million equity investment in the company, the Wall Street Journal reports. The recent and formal exercise of that option requires St. Jude Medical to pay $175 million plus milestone payments.
The acquisition makes St. Jude Medical the only medical device manufacturer to offer radiofrequency ablation (RFA) spinal cord stimulation and DRG stimulation therapy for chronic pain patients, according to the WSJ article.
St. Jude last year added RFA devices to its expanding chronic pain portfolio by buying NeuroTherm for approximately $200 million in cash. The company also develops and sells more traditional spinal cord stimulation (SCS) technologies.
Unlike SCS, which targets nerves along the spinal cord’s dorsal column, DRG stimulation targets the dorsal root ganglion, a cluster of sensory nerves that affect pain transmission. The Axium system has proven effective in treating conditions currently underserved by traditional SCS, such as chronic intractable pain in the leg, foot, and groin, according to a press release from St. Jude Medical. The findings are based on the ACCURATE U.S. IDE trial and will be presented at the International Neuromodulation Society (INS) Congress this June.
“Physicians need a range of options to effectively treat chronic pain, and our acquisition of Spinal Modulation is part of our ongoing commitment to providing physicians new and innovative therapy options,” St. Jude Medical CEO Michael T. Rousseau said in the release. “Dorsal root ganglion stimulation with the Axium system is highly complementary to our current chronic pain product portfolio, and acquiring this technology will further our ability to partner with physicians to reduce the burden of chronic pain.”
According to St. Jude, chronic pain affects approximately 1.5 billion people worldwide — more than heart disease, cancer and diabetes combined.
“St. Jude Medical has a legacy of bringing new, innovative therapy options to patients suffering from chronic pain, and we believe adding DRG stimulation to their chronic pain portfolio will have a number of benefits to patients worldwide,” Spinal Modulation president and CEO David Wood said in the release. “We’re proud of what the Spinal Modulation team has built over the past 10 years, and see great potential for St. Jude Medical to continue expanding access to DRG stimulation therapy for patients who may benefit from additional therapeutic options.”
Image credit: Spinal Modulation Inc.