Johnson & Johnson (JNJ) said on Tuesday that it has agreed to pay $600 million up front and up to $1.1 billion in additional payments to buy V-Wave Ltd., a privately held company that is working on treatments for people with heart failure.
V-Wave will join Johnson & Johnson MedTech.
The deal will help J&J “accelerate its shift into high-growth and high-opportunity markets and will deepen its relationships with structural interventional cardiologists and heart failure specialists,” the company said.
Heart failure with reduced ejection fraction, or HFrEF, is what V-Wave’s cardiovascular implant device is meant to treat.
When someone has HFrEF, their heart muscle isn’t strong enough to pump blood to their body that is full of oxygen and nutrients. By making a shunt between the left and right atrium, the device is meant to lower the high left atrial pressure that is a sign of congestive heart failure. The device lowers the number of heart failure admissions and cardiovascular events.
The device can be put in through a minimally invasive catheter-based process. It was named an FDA Breakthrough Device in 2019 and J&J said it could be the first of its kind to hit the market.
J&J said that every year in the U.S., about 800,000 people have HFrEF.
Before the end of the year, the deal should go through. The business thinks it will have to pay about $600 million in in-process research and development costs once the deal is done. It also thinks it will lose about 24 cents in 2024 EPS and then about 5 cents in 2025.
Also, J&J said that the U.S. Food and Drug Administration has cleared the first chemotherapy-free combination treatment for a certain type of lung cancer.
The price of J&J stock was a little higher before the market opened. It is up 1.8% so far this year, while the S&P 500 SPX 0.14% has gained 17.6%.
