Relievant Medsystems Intracept nerve ablation procedure
The Intracept procedure. [Image from Relievant Medsystems]

Boston Scientific

(NYSE: BSX)

announced today that it completed its previously announced acquisition of Relievant Medsystems.

In September, Boston Scientific announced plans to acquire Relievant for an upfront cash payment of $850 million. Additional payments are contingent on sales performance over the next three years. Minneapolis-based Relievant developed and commercialized the Intracept intraosseous nerve ablation system for chronic pain. The minimally invasive, FDA-cleared, same-day, outpatient procedure treats chronic vertebrogenic low back pain.

The procedure utilizes targeted radiofrequency energy to ablate the basivertebral nerve (BVN). This stops the nerve from transmitting pain signals to the brain. The procedure takes approximately one hour to perform. Boston Scientific says the Intracept system adds to its chronic pain portfolio.

Relievant recently earned national coverage from Anthem Blue Cross Blue Shield and Humana, both of which went into effect. These policies expand access to more than 150 million lives, according to a news release.

“The revolutionary therapy from Relievant has tremendous potential to help even more people living with chronic pain,” said Jim Cassidy, president, Neuromodulation, Boston Scientific. “The completion of this acquisition further differentiates our position in advanced interventional chronic pain, offering physicians the broadest selection of evidence-based treatment options that address multiple pain targets and change patients’ lives.”

More acquisition details from Boston Scientific

Boston Scientific anticipates more than $70 million in sales generated by Relievant in 2023, with year-over-year growth expected to eclipse 50% in 2024.

On an adjusted basis, the company expects an immaterial impact to earnings per share in 2024. It plans for a slightly accretive impact in 2025, with an increasingly accretive effect thereafter. Boston Scientific expects a more dilutive GAAP impact due to amortization expense and acquisition-related charges.

Speaking at the company’s 2023 Investor Day event in September, Boston Scientific Chair and CEO Mike Mahoney outlined how the Relievant buy falls in line with the company’s larger M&A strategy.

“We’ve acquired, I think, over 40 companies or so over the past 10 years, most recently signing Relievant,” he said. “We’ve had a few that haven’t worked out over the years, but the majority of these tuck-in M&As have really improved our innovation cadence and our weighted average market growth rate.”

Cassidy lauded the way the Relievant buy folds into Boston Scientific’s portfolio during the Investor Day event.

“Look at our portfolio,” he said. “We’ve got spinal cord stimulation, traditional RF, Vertiflex, Relievant — that’s a compelling portfolio. That’s a portfolio that’s tough to match. I think it sets us apart in this space and puts us as clear leaders in interventional pain.”

Jesse Feinkind, VP and GM of Boston Scientific’s pain franchise, said the move ties into Boston Scientific’s category leadership goals.

“It’s a nice feather in our cap when it comes to being a category leader.” Jesse Feinkind “We feel like this is a fantastic platform, therapy, to add to our interventional pain management therapy portfolio. It adds to our growth and our category leadership strategy.”

The analysts’ take

BTIG analysts Marie Thibault and Sam Eiber maintained their “Buy” rating for Boston Scientific when the companies announced the acquisition agreement. They highlighted Relievant’s reach, which has seen its Intracept system used to treat more than 10,000 patients commercially. It also has reimbursement options through Medicare and a number of commercial plans in addition to the latest coverage wins.

According to the analysts, the transaction will expand Boston Scientific’s neuromodulation business amid a stall in recent quarters.

Needham analysts Mike Matson, David Saxon and Joseph Conway shared BTIG’s views on expanding the neuromodulation business. They noted that Intracept could complement its pain management products, including spinal cord stimulators and the Vertiflex Superion spacer.

Truist analysts Richard Newitter, Samuel Brodovsky and Lin Zhang also responded positively to the acquisition.

“Strategically, we see a deal of this type and size being right in [Boston Scientific’s] wheelhouse as a high growth, margin accretive asset that the company can leverage,” they wrote.