Spectranetics To Buy Covidien's Stellarex Drug Coated Balloon Assets For $30 Mln

(RTTNews) - Spectranetics Corp. (SPNC) has agreed to acquire Covidien plc's (COV) Stellarex drug coated angioplasty balloon or DCB platform for $30 million, the two companies said Sunday. The deal will expands Spectranetics' portfolio of solutions to treat complex vascular conditions in projected $700 million drug coated balloon segment.

The transaction is subject to approval by the Federal Trade Commission and other regulatory agencies, as well as closure of the pending acquisition of Covidien by Medtronic, which is expected to occur in early 2015.

Stellarex expects the DCB platform to receive European CE mark approval in late 2014 or early 2015. The company anticipates a European launch of the product immediately upon CE mark approval, with U.S. commercialization in the 2017 timeframe, following FDA approval.

Spectranetics expects the acquisition of the Stellarex platform to provide a revenue growth catalyst beginning in 2015, and which has the potential to contribute at least $100 million of revenue within two to three years of commercialization in the U.S.

The investment required to capitalize on this opportunity will lead to estimated dilution to Spectranetics' 2015 earnings per share in the range of $28.0 million to $32.0 million, or $0.65 to $0.75 per share, driven primarily by research and development costs associated with the ongoing Stellarex clinical trial program.

The company anticipates the transaction to be accretive to adjusted operating income, excluding special items, in the first full year following U.S. commercialization.