St. Jude Medical Plans to Acquire NeuroTherm

St. Jude Medical Inc. has agreed to purchase NeuroTherm Inc., a privately held manufacturer of interventional pain management therapies for approximately $200 million in cash.

NeuroTherm makes devices for the treatment of spinal pain using radiofrequency ablation (RFA), a segment of the chronic pain market in which St. Jude Medical does not currently participate. The company expects to complete this transaction by the end of the third quarter, subject to customary closing conditions. NeuroTherm is expected to add approximately $10 million to $15 million to St. Jude Medical’s 2014 sales.

“NeuroTherm’s radiofrequency ablation products are an ideal complement to St. Jude Medical’s chronic pain portfolio, providing our global sales force with additional interventional pain therapies that offer potential relief to patients earlier in the chronic pain continuum,” said Michael T. Rousseau, chief operating officer of St. Jude Medical. “As the only medical device manufacturer with both RFA and spinal cord stimulation, this acquisition will enable us to offer more treatment options to patients worldwide who suffer from the debilitating effects of chronic pain.”

Chronic pain affects approximately 1.5 billion people worldwide — more than heart disease, cancer and diabetes combined. The burden of chronic pain carries an economic price tag of $300 billion annually in the U.S. and costs €300 billion ($407 billion U.S.) to European health care systems. In 2013, there were 230 million Americans diagnosed with acute and chronic pain; only about 8 percent of these patients received interventional therapy.

RFA is a minimally invasive procedure that is designed to reduce back pain by interrupting the nerve supply from painful facet joints in the neck or back. The tecnnique involves the pinpoint application of heat to destroy the painful nerve or nerves. The treatment has been used for over 25 years and provides interventional pain therapy to patients earlier in the chronic pain continuum, often prior to neurostimulation or surgical intervention.

NeuroTherm’s flagship technology is a multi-lesion RF generator that allows real-time temperature monitoring and enables continuous delivery of energy to each site designed to ensure complete treatment of each targeted spinal nerve. The company’s products are available in over 65 countries.

“St. Jude Medical’s global leadership in chronic pain represents an excellent opportunity to bring NeuroTherm’s RF ablation technologies to more pain specialists and patients,” said Christopher R. von Jako, Ph.D., president and CEO of NeuroTherm said. “We are proud of the business that NeuroTherm has built and thank our employees and shareholders for their commitment to developing innovative interventional pain management therapies. We see a promising future withSt. Jude Medical that combines our products with a leading pain franchise and further develops the underpenetrated global market for chronic pain.”

St. Jude Medical is based in St. Paul, Minn., while NeuroTherm calls Wilmington, Mass. home.