NEW BRUNSWICK, N.J. - Johnson & Johnson (NYSE: JNJ (NYSE:JNJ)) announced its plans to acquire V-Wave Ltd., a company specializing in heart failure treatment devices. The acquisition, valued at $600 million with additional milestone payments potentially reaching $1.1 billion, is aimed at expanding Johnson & Johnson MedTech's cardiovascular portfolio.
V-Wave's Ventura® Interatrial Shunt (IAS) is designed to alleviate symptoms of heart failure by creating a shunt between the heart's atria, reducing hospitalizations and cardiovascular events. This minimally invasive device, which has received FDA Breakthrough Device Designation and the CE mark, is positioned to be the first of its kind on the market.
The acquisition is expected to close before the end of 2024, pending regulatory approvals. It will be accounted for as an asset acquisition, resulting in a non-tax deductible charge of approximately $600 million. Johnson & Johnson anticipates a dilution of adjusted earnings per share by $0.24 in 2024 and $0.06 in 2025. The company will update its full-year financial outlook during the third quarter results on October 15, 2024.
This move by Johnson & Johnson MedTech is seen as a strategic effort to strengthen its role in treating cardiovascular diseases and to address a significant treatment gap for patients with heart failure. The device targets an estimated 800,000 U.S. patients annually, indicating a substantial market opportunity.
Tim Schmid, Executive Vice President of Johnson & Johnson MedTech, expressed enthusiasm for the acquisition, citing a shared mission with V-Wave to innovate in cardiovascular care. Dr. Neal Eigler, CEO of V-Wave, also conveyed confidence in Johnson & Johnson MedTech's ability to bring their technology to patients effectively.
Upon completion of the transaction, V-Wave will become part of Johnson & Johnson MedTech, with Michael Bodner overseeing the integration. The financial impact of the acquisition will be reported within Johnson & Johnson MedTech's Cardiovascular portfolio.
This article is based on a press release statement.
In other recent news, pharmaceutical giant Johnson & Johnson (J&J) has been making significant strides in healthcare developments. The U.S. Food and Drug Administration (FDA) has approved J&J's new first-line treatment, RYBREVANT® (amivantamab-vmjw) combined with LAZCLUZE™ (lazertinib), for patients with a specific type of lung cancer, non-small cell lung cancer (NSCLC) with certain epidermal growth factor receptor (EGFR) mutations. The novel treatment, which demonstrated a 30 percent reduction in the risk of disease progression or death compared to the previous standard of care, is the first approval of a multitargeted, chemotherapy-free regimen for this patient population.
In the legal arena, J&J is expected to announce significant claimant support for its proposed $6.48 billion settlement related to allegations that its talc products caused cancer. The company anticipates that at least 75% of claimants have voted in favor of a bankruptcy settlement, meeting the legal threshold necessary for a judge to approve the settlement.
Additionally, the Biden administration has selected 10 prescription medicines, including J&J's blood thinner Xarelto, for price negotiations with the Medicare health program. The outcome of these negotiations is expected to save the U.S. government $6 billion in the first year from newly negotiated lower prices on these leading prescription drugs for Medicare. These recent developments highlight J&J's ongoing efforts to address both its legal challenges and its commitment to advancing medical treatments.
InvestingPro Insights
As Johnson & Johnson (NYSE: JNJ) gears up to enhance its cardiovascular offerings with the acquisition of V-Wave Ltd., investors are closely monitoring the company's financial health and market position. Johnson & Johnson's commitment to innovation and expansion in the medical devices sector is underscored by its solid financial metrics and industry standing. With a market capitalization of $384.27 billion and a robust gross profit margin of 69.43% over the last twelve months as of Q2 2024, the company's financial prowess is evident.
An InvestingPro Tip highlights Johnson & Johnson's impressive track record of raising its dividend for 53 consecutive years, signaling strong financial stability and a commitment to shareholder returns. Additionally, the company's low price volatility and position as a prominent player in the Pharmaceuticals industry provide a reassuring context for investors considering the impact of the V-Wave acquisition.
InvestingPro Data further reveals a low P/E ratio of 10.23, suggesting an attractive valuation relative to near-term earnings growth. Moreover, the company's cash flows have been sufficient to cover interest payments, a reassuring sign for investors concerned about the financial implications of the $600 million asset acquisition charge.
For investors seeking more comprehensive analysis and insights, there are additional InvestingPro Tips available, which delve deeper into Johnson & Johnson's financials, market performance, and industry outlook. These tips can be accessed through the InvestingPro platform, offering valuable information for making informed investment decisions.
As Johnson & Johnson prepares to update its full-year financial outlook, the InvestingPro platform stands ready to provide real-time data and expert analysis to help investors navigate the evolving landscape of the healthcare sector.
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