Preventice Solutions, the maker of various wearable cardiac sensors for remote patient monitoring, is set to be acquired by medical technology firm Boston Scientific for $925 million, with as much as $300 million in potential commercial milestones on the table as well.
Due to Boston Scientific's existing 22% equity stake in Preventice, those price tags translate to $720 million and a potential $230 million that would be paid out by Boston Scientific. The deal is expected to close before the halfway point of 2021.
WHAT'S THE IMPACT
Minneapolis-based Preventice was founded in 2007. Its current offerings are dominated by its BodyGuardian line of devices built for adult and pediatric patients. Taking the form of patches, harnesses and monitors, the devices connect to PatientCare, the company's cloud-based, EHR-integrated monitoring platform that uses artificial intelligence to provide clinical insights for providers. Of note, some of the wearables in the BodyGuardian family are fully waterproof and include features such as mobile app connectivity.
Preventice logged $158 million in net sales during 2020, which, according to the deal announcement, was a 30% increase from its performance in 2019.
Scott Olson, senior vice president and president of rhythm management at Boston Scientific, said in the deal announcement that the acquisition is intended to flesh out the medical tech company's broader push into the cardiac diagnostics and services space. Specifically, Preventice's ambulatory ECG business would sit alongside Boston Scientific's recent push into the complementary implantable cardiac monitor space.
"We are confident that by adding the broad technology portfolio and expertise of Preventice, our combined teams can continue to deliver rapid growth in these highly-attractive markets while also establishing an important adjacency to our core cardiac rhythm management and electrophysiology businesses," he said.
THE LARGER TREND
Preventice's growth trajectory extended beyond its sales numbers. The company had raised a $137 million Series B round as recently as last summer (in which Boston Scientific had also participated). At the time, the Preventice said it was aiming to expand its salesforce, invest in its technology and product innovations, and keep building a body of clinical evidence to support its remote cardiac monitoring products.
Remote monitoring care models have generally become more appealing during the course of the COVID-19 pandemic, with providers finding new value in technologies that support care management without the need for hospital admissions or in-person consultations. The Centers for Medicare & Medicaid Services supported several new allowances for telehealth and remote monitoring programs, allowing providers to establish new hospital-at-home programs or other setups that take advantage of these new tools and payment structures.
As a result, there's a long list of vendors that are active in the space. These companies offer a wide range of connected health devices other data-driven patient management systems for short- and long-term health monitoring.
ON THE RECORD
"We have been humbled to provide thousands of physician practices with services based on near real-time clinical data to enable the diagnosis and management of more than one million cardiac patients, without needing to interrupt their daily activities," Jon Otterstatter, CEO of Preventice Solutions, said in a statement. "Boston Scientific has been a key investor in Preventice for more than five years and we believe the company has the commercial reach, diagnostics expertise and operational infrastructure to bring these advanced monitoring technologies to more patients worldwide."