IRELAND – Medtronic has entered into a strategic partnership with CathWorks and secured an option to acquire coronary artery disease (CAD) management company for as much as US$585 million plus milestones.

The deal sees Medtronic immediately invest US$75 million in CathWorks and agree to co-promote its FFRangio System in the US, Europe and Japan.

Medtronic will have the option to acquire CathWorks if it meets certain milestones. CathWorks also has the right to compel Medtronic to complete the acquisition if it chooses not to exercise its option, which expires in July of 2027.

CAD is a common heart condition where the major blood vessels that supply the heart struggle to send enough blood and oxygen, often due to a narrowing or blockage of the coronary arteries caused by fatty material build-up (plaque).

It is the leading cause of death in the United States and can be caused by high cholesterol, diabetes, a sedentary lifestyle, smoking, and high blood pressure.

Cardiovascular diseases kill about 18 million people, annually, according to the World Health Organization.

FFRangio delivers multi-vessel fractional flow reserve results without the use of an invasive pressure wire or hyperemic stimulus to evaluate the impact of the narrowing of coronary arteries.

Medtronic made a minority investment in CathWorks in 2018, positioning it to monitor the progress of the Israeli startup.

Cardiovascular diseases kill about 18 million people, annually, according to the World Health Organization.

The US Food and Drug Administration granted 510(k) clearance to FFRangio late in 2018. Later, CathWorks raised US$60 million across series C and series D financing rounds and received approval and national reimbursement in Japan.

Having seen CathWorks’ progress, Medtronic has tightened its ties to the startup, upping its investment in the company and immediately stepping in to co-promote FFRangio in the markets where it is available commercially. The deal ends CathWorks’ search for a partner.

For Medtronic, the deal presents a way to strengthen its cardiovascular portfolio. CathWorks pitches its technology as a tool that combines angiograms and computational science to support coronary artery disease decisions, for example by showing where fractional flow reserve drops occur.

In a pooled analysis of five studies, published in the Journal of the American College of Cardiology (JACC): Cardiovascular Interventions, FFRangio system achieved diagnostic accuracy of 93%, sensitivity of 91%, and specificity of 94%.

For CathWorks, this deal represents the right partner to help it expand the reach of the FFRangio system globally according to CathWorks President and CEO Ramin Mousavi.

“Medtronic not only brings the strength of its commercial team to CathWorks, but a reputation of investing and defining new opportunities to revolutionize care,” Mr. Mousavi said in a statement

CathWorks’ recent acquisition trail

In recent years, CathWorks has been on the purchasing spree for Israeli technologies.

In 2018, Medtronic bought Mazor Robotics Ltd., an Israeli biotech firm that develops robotic surgical systems, for US$1.6 billion, the biggest-ever “exit” for an Israeli biotech company. Medtronic previously owned an 11 percent stake in Mazor.

That same year, Medtronic announced the acquisition of Nutrino Health, an Israeli maker of nutrition-related data services, analytics, and technologies, for a reported US$100 million.

Medtronic acquired Netanya-based Ventor Technologies, a maker of transcatheter heart valve technologies for the treatment of aortic valve disease, in 2009 for US$325 million.

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