Boston Scientific stock popped Wednesday after the medtech giant agreed to fully acquire Bolt Medical for up to $900 million.
Bolt Medical uses intravascular lithotripsy, or IVL, to crack calcifications in the arteries. This allows the blood to flow easier. Traditionally, doctors have used atherectomy to treat patients with coronary and peripheral artery disease. But that process — using a small drill to dig through calcifications — can cause problems if debris flows downstream, clogging the arteries again.
Boston already owned 26% of Bolt Medical. The deal features $443 million up front for the 74% stake not yet owned, and up to $221 million in potential milestone payments. Excluding what Boston already owns, the deal fully values Bolt at $600 million up front and $300 million in milestones.
"Strategically, this deal fits right into BSX's playbook," Evercore ISI analyst Vijay Kumar said in a note to clients. "BSX is a leader in CAD (coronary artery disease), and one of the few product gaps within its coronary portfolio was IVL. Assuming Bolt gets an FDA approval, this deal should fill this product gap."
Boston Scientific stock surged 4.3% to 95.94. Shares broke out Tuesday, topping a buy point at 91.93 out of a flat base, according to MarketSurge. The move Wednesday morning put shares close to the top of the buy zone, which runs up to 96.53.
A Massive IVL Market
The market for IVL is worth an estimated $8.5 billion, Needham analyst Mike Matson said in a report. There has already been one big takeover in the space. Last year, Johnson & Johnson spent $13.1 billion to buy Shockwave Medical. Shockwave was a leader in IVL tech.
This could be a drawback for Boston Scientific, however. Several of J&J's patents, via Shockwave, have already been invalidated. But Johnson & Johnson could still file a patent infringement lawsuit against Boston Scientific if the company tries to commercialize Bolt Medical's IVL system.
Still, Matson sees the deal as a good fit. It adds to two big takeovers by Boston Scientific in 2024 worth roughly $4.5 billion together. He kept his hold rating on Boston Scientific stock.
"The Bolt Medical acquisition should provide a new growth driver for BSX," he said.
Follow Allison Gatlin on X/Twitter at @IBD_AGatlin.
