Endovascular device company ev3 has signed a definitive agreement to acquire Chestnut Medical Technologies, a Menlo Park, Calif.-based developer of minimally invasive therapies for interventional neuroradiology.
ev3 said that the transaction will expand its neurovascular product portfolio with the addition of a pipeline embolization device for treating cerebral aneurysms as well as an Alligator Retrieval device for foreign body retrieval.
Under the terms of the agreement, the Plymouth, Minn.-based ev3 will acquire 100 percent of the equity interests of Chestnut for a total upfront consideration of $75 million paid upon closing, 30 to 40 percent of which is payable in cash, with the remaining portion payable in ev3 common stock.
An additional milestone-based contingent payment of up to $75 million is payable in a combination of cash and ev3 common stock once the FDA grants pre-market approval of the pipeline embolization device.
Chestnut said its pipeline technology is a new class of embolization device that is designed to divert blood flow away from the aneurysm in order to provide a complete and durable aneurysm embolization while maintaining patency of the parent vessel. It has already received CE Mark approval in Europe. Chestnut is currently conducting two clinical studies under FDA investigational device exemptions to gain approval for the pipeline embolization device in the U.S.
ev3 said it will finance the upfront cash payment due upon closing through cash on hand. Any contingent milestone payment is not expected to be paid until 2011. The transaction is subject to customary closing conditions and is expected to close within approximately 45 days, according to ev3.