Medtronic to Invest in Cardiology Product of Israeli Start-Up BioControl

(MDT; Minneapolis, MN, USA) has agreed to invest US$70 million in Israeli biotech start-up BioControl (Yehud, Israel), with further acquisition rights for $550 million at a later date.

This amalgamation represents a true win-win scenario that significantly expands the global reach and growth opportunities for both companies. Cardiovascular products, which represents Medtronic's third-largest business segment stands to gain considerably with the inclusion of BioControl's novel product Cardio-Fit; world's first device that treats heart failure through the stimulation of the vagus nerve, a product for which international, multicenter, pivotal study is currently being carried out across cities in Europe and the US. Clearly, Medtronic stands to gain additionally from CardioFit's current marketability in European countries while clinical studies are underway for approval in North America.

The agreement has also granted Medtronic an option to acquire BioControl for $350 million versus $500 million in case BioControl fails to complete the clinical trials of its device or is unable to obtain [US] FDA approval in the next few years.

CardioFit works by stimulating the vagus nerve in the neck with an electrostimulator that is monitored by an intracardiac electrogram (EGM) sensor. The device has obtained EU CE Marking certification in December 2008, but has yet to obtain FDA's approval for marketing in the USA. BioControl, which is expecting three more years of clinical studies toward CardioFit's approval by FDA, Medtronic's investment will provide the necessary financial impetus to conduct future trials and help the company gain stability and momentum in the domestic and global markets.

The investment in BioControl is Medtronic's second major move in the Israeli life-sciences market, the first being the acquisition of Ventor Technologies Ltd. for $325 million in February 2009, providing Medtronic access to innovative products across therapy areas.

BioControl Medical is a privately held medical device company headquartered in Yehud, Israel, founded in 1999 by Yossi Gross and brothers Eyal and Boaz Lipshitz. The company develops and markets advanced implantable devices for the treatment of autonomic disorders and while their first line of products were focused on Urology, the second line of products includes the novel Cardio-fit system.

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