Covidien Announces Definitive Agreement to Acquire CV Ingenuity
DUBLIN--(BUSINESS WIRE)-- Covidien (NYS: COV) , a leading global provider of healthcare products, today announced a definitive agreement to acquire CV Ingenuity.The companies expect to complete the acquisition in the first calendar quarter of 2013. Financial terms of the transaction were not disclosed.
CV Ingenuity, a privately-held company based in Fremont, CA, is focused on improving patient outcomes in the treatment of peripheral arterial disease (PAD) by providing solutions to relieve vascular obstructions, inhibit restenosis, and allow natural vessel healing. The company's core technology, while still in the investigational phase, is a Drug Coated Balloon (DCB) platform with a novel, proprietary, tunable, rapid-release system.
"We continue to be focused on technologies that deliver improved patient care, delighting both our physician and hospital system customers," said Stacy Enxing Seng, President, Vascular Therapies, Covidien. "CV Ingenuity offers a robust DCB portfolio, and offering a DCB technology is something that we believe is necessary to continue to improve care for patients suffering from PAD, as well as ensuring we are a full line partner with our customers today and into the future."
As a result of this transaction, Covidien expects to increase research and development expenditures for the next several years to fund the clinical development of CV Ingenuity technologies. Additional expenditures are expected to be more than $20 million in the second half of fiscal 2013 and more than $30 million in fiscal 2014. Despite these additional expenditures and the negative impact on selling, general and administrative expenses from the transaction, Covidien is reaffirming all of its prior guidance ranges, which were last updated on November 9, 2012. Also, Covidien does not anticipate receiving United States Food and Drug Administration approval for a DCB product using the CV Ingenuity technology until fiscal 2017.
Once the transaction has been completed, Covidien will report the CV Ingenuity business as part of its Vascular product line in the Medical Devices segment.
Covidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading product lines in three segments: Medical Devices, Pharmaceuticals and Medical Supplies. With 2012 revenue of $11.9 billion, Covidien has 43,000 employees worldwide in 70 countries, and its products are sold in over 140 countries. Please visit www.covidien.com to learn more about our business.
Any statements contained in this communication that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on our management's current beliefs and expectations, but are subject to a number of risks, uncertainties and changes in circumstances, which may cause actual results or Company actions to differ materially from what is expressed or implied by these statements. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, our ability to effectively introduce and market new products or keep pace with advances in technology, the reimbursement practices of a small number of large public and private insurers, cost-containment efforts of customers, purchasing groups, third-party payors and governmental organizations, intellectual property rights disputes, complex and costly regulation, including healthcare fraud and abuse regulations and the Foreign Corrupt Practices Act, manufacturing or supply chain problems or disruptions, rising commodity costs, recalls or safety alerts and negative publicity relating to Covidien or its products, product liability losses and other litigation liability, divestitures of some of our businesses or product lines, our ability to execute strategic acquisitions of, investments in or alliances with other companies and businesses, competition, risks associated with doing business outside of the United States, foreign currency exchange rates and environmental remediation costs. These and other factors are identified and described in more detail in our Annual Report on Form 10-K for the fiscal year ended September 28, 2012, and in subsequent filings with the SEC. We disclaim any obligation to update these forward-looking statements other than as required by law.
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Coleman Lannum, CFA
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