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Johnson & Johnson has announced it will acquire V-Wave Ltd., a company specializing in heart failure treatments, in a deal potentially worth $1.7 billion.
The agreement includes an upfront payment of $600 million, with additional payments up to $1.1 billion based on achieving regulatory and commercial milestones. The transaction is expected to be completed by the end of the year.
Johnson & Johnson Acquires V-Wave Ltd.
V-Wave Ltd. has developed a pioneering device aimed at reducing heart failure cases. This device, which is inserted into the heart through a minimally invasive procedure, targets a condition known as heart failure with reduced ejection fraction (HFrEF). HFrEF occurs when the heart's ability to pump blood effectively is compromised, leading to serious health issues.
The device has received FDA Breakthrough Device Designation in 2019 and is not yet approved for use in the United States, Business Times reported. It is designed to lower elevated left atrial pressure, a key indicator of congestive heart failure, by creating a connection between the heart's left and right atrium. Studies show that this technology can significantly reduce cardiovascular events and hospitalizations related to heart failure.
According to Reuters, the acquisition of V-Wave aligns with Johnson & Johnson's strategy to strengthen its MedTech division, especially as the company prepares for increased competition in the psoriasis drug market with its popular drug Stelara. Johnson & Johnson has already made significant moves to expand its portfolio, including a $13.1 billion acquisition of Shockwave Medical and purchases of Numab's skin disorder drug and Proteologix for $1.25 billion and $850 million, respectively.
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J&J's MedTech Growth
In a statement, Johnson & Johnson expressed its hope about integrating V-Wave into its MedTech operations. The company believes the acquisition will enhance its ability to serve heart failure patients and improve relationships with cardiologists and heart specialists.
The acquisition is expected to impact Johnson & Johnson's earnings per share, with a projected reduction of approximately 24 cents in 2024 and an additional 6 cents in 2025 due to the associated research and development costs. The deal underscores the company's commitment to advancing medical technology and addressing heart failure, a condition affecting around 800,000 patients in the US yearly.
In a separate development, Johnson & Johnson also announced FDA approval for a new combination treatment for non-small cell lung cancer. This treatment, which does not involve chemotherapy, marks a significant advancement in cancer care.
On Tuesday, August 20, Johnson & Johnson's stock saw a slight increase of 0.3%, with a 2% rise this year compared to a 17% gain in the S&P 500 index.
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