Johnson & Johnson (J&J) announced on Tuesday that it will acquire Israeli startup V-Wave for up to $1.7 billion. This strategic move aims to strengthen J&J’s position in the rapidly growing congestive heart failure market, projected to reach $30 billion globally by 2030.
The acquisition marks the 10th largest deal in Israel’s history. J&J will pay $600 million upfront, with an additional $1.1 billion in potential milestone payments based on regulatory approvals and commercial performance. The deal is expected to provide a modest boost to J&J’s earnings, contributing an estimated 24 cents per share in 2024 and 6 cents per share in 2025.
The true value of this acquisition lies in the long-term growth potential of V-Wave’s innovative heart failure treatment technology. V-Wave’s flagship product, the Ventura Interatrial Shunt (IAS), is an implantable device designed to alleviate elevated left atrial pressure in patients with congestive heart failure. The minimally invasive IAS procedure aims to reduce the risk of cardiovascular events and hospitalizations for those suffering from heart failure with reduced ejection fraction.
This condition occurs when the heart muscle cannot pump blood effectively. By creating a shunt between the left and right atriums, the device helps relieve pressure buildup in the left atrium, potentially improving patient outcomes and quality of life.
This acquisition comes at a crucial time for J&J, as the company faces increased competition for its blockbuster psoriasis drug, Stelara, which will lose patent protection next year. In response, J&J has been actively pursuing mergers and acquisitions to enhance its product pipeline and drive future growth.
Israel has earned its reputation as the “Startup Nation” due to the success of many companies that have emerged from the country. One notable example is Mobileye, which holds the record for the largest acquisition of an Israeli company, valued at $15.3 billion when Intel acquired it in 2017.
Tim Schmid, Executive Vice President and Worldwide Chairman of Johnson & Johnson MedTech, said, “We know V-Wave well, with our relationship dating back to our original investment in the company in 2016. We have a deep understanding of the technology and science, as well as the company’s commitment to patients.”
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Earlier this year, J&J announced the $13.1 billion acquisition of Shockwave Medical to expand its cardiovascular device portfolio. The company has also acquired Numab’s skin disorder drug for $1.25 billion and Proteologix for $850 million.
Dr. Neal Eigler, CEO of V-Wave, expressed enthusiasm about the partnership, stating, “At V-Wave, we are dedicated to achieving our vision to help patients around the world. We know Johnson & Johnson MedTech shares this mission. We look forward to continuing to build a world where cardiovascular disease is prevented, treated, and cured.”
The acquisition is expected to close by the end of 2024, pending necessary approvals and other closing conditions. Once completed, V-Wave will become part of J&J MedTech, with its financials reported within J&J’s cardiovascular portfolio. Michael Bodner, Group President of Heart Recovery & Intravascular Lithotripsy, will oversee the V-Wave team after the deal closes.
This acquisition underscores J&J’s commitment to addressing cardiovascular diseases and expanding its treatment options in a market that continues to grow.