Medtronic (NYSE:MDT) announced today that it entered into a strategic partnership with coronary artery disease (CAD) technology developer CathWorks.
Under the agreement, Medtronic will invest up to $75 million and immediately begin co-promotion for CathWorks’ FFRangio system in the U.S. Europe and Japan, where it is commercially available. A separate agreement offers Medtronic the option to acquire CathWorks once certain undisclosed milestones are met.
According to a news release, CathWorks also has the right to compel Medtronic to acquire the company if Medtronic does not exercise the option, which expires in July of 2027 with an estimated value of up to $585 million and potential undisclosed earn-out payments post-acquisition.
Medtronic has held a minority investment in CathWorks since 2018. It expects the co-promotion agreement to be neutral to its fiscal 2023 GAAP and adjusted earnings per share and neutral-to-accretive thereafter.
“CathWorks has been looking for the right partner to help us expand the reach of the FFRangio system globally,” CathWorks President and CEO Ramin Mousavi said in the release. “Medtronic not only brings the strength of its commercial team to CathWorks, but a reputation of investing and defining new opportunities to revolutionize care. I am excited about the possibilities ahead as we partner with Medtronic to expand the use of our technology to the U.S., Japan and Europe.”
Kefar Sava, Israel-based CathWorks designed its FFRangio system to combine artificial intelligence (AI) and advanced computational science to obtain quick and reliable fractional flow reserve (FFR, the diagnostic technique for evaluating the physiologic impact of coronary artery stenosis) values from routine angiograms (X-rays), eliminating the need for drug stimulation and invasive pressure wires.
Data published in the Journal of the American College of Cardiology (JACC): Cardiovascular Interventions demonstrated diagnostic accuracy of 93%, sensitivity of 91%, and specificity of 94% with the FFRangio system.
“Data and AI-enabled technologies have been shown to drive improved workflow and patient outcomes across the healthcare ecosystem. In cardiology specifically, these new advances in technology provide clinicians with the opportunity to gain additional information to improve and evolve the diagnosis and treatment of patients with CAD,” Medtronic SVP and President of Coronary & Renal Denervation Jason Weidman said. “We are excited to partner with CathWorks to offer the FFRangio system to our customers. We believe strongly in the potential of the technology and are committed to strengthening our relationship with CathWorks to provide new, innovative technologies and solutions from diagnosis to treatment.”