Olympus to pay $300M to buy Veran for lung navigation system

Dive Brief: Olympus has struck a deal to buy Veran Medical Technologies for $300 million […]

Dive Brief:

  • Olympus has struck a deal to buy Veran Medical Technologies for $300 million upfront to grow its interventional pulmonology business.
  • Veran sells an electromagnetic thoracic navigation system that Olympus sees as a good fit for its endoscope technologies. Olympus has identified respiratory devices as one of three core medical areas for its therapeutic division.
  • BTG had secured an option to buy Veran in 2018 in association with a $20 million investment, only for the U.K. medtech to be the subject of a $4.2 billion takeover by Boston Scientific.

Dive Insight:

Japanese conglomerate Olympus committed to scaling up its therapeutic division late last year in the belief a forecast growth rate of around 8% makes it an attractive market. In particular, Olympus zeroed in on gastrointestinal, urology and respiratory as areas of focus, leading it to search for M&A in those fields.

In August, Olympus agreed to buy Arc Medical Design, giving it full control of the Endocuff range of gastrointestinal devices. On Friday, Olympus disclosed the next step in its M&A-driven growth plan. Olympus is set to pay $300 million to buy Veran, with a further $40 million tied to an undisclosed milestone.

The takeover will add Veran’s SPiN Thoracic Navigation System to Olympus’ portfolio of respiratory devices. Physicians use SPiN to generate 3D maps of the lungs. During procedures, electromagnetic sensors support navigation and help track patient breathing. Veran claims the system provides greater control over bronchoscopic yields.

That claim is supported by some clinical data. A paper on 50 patients with suspect lung lesions linked the use of the technology to a diagnostic yield of 83%. The authors compared the result favorably to conventional bronchoscopic techniques using fluoroscopic guidance. CT-guided transthoracic needle aspiration hits yields approaching 90% but causes a collapsed lung in a significant minority of people.

Veran is continuing to generate data to support the use of SPiN through a registry study but Olympus has seen enough to pull the trigger on a deal. In a statement, Nacho Abia, the CEO of Olympus’ operation in the Americas, said securing immediate access to the navigation system and proprietary devices is the most significant part of the deal.

In 2019, the products generated sales of around $29 million, up 59% over revenues in 2017. Olympus is still assessing the impact of the acquisition on its financial forecasts. In addition to products, the takeover gives Olympus a U.S. sales team.

BTG became the most likely acquirer of Veran in 2018 when it invested $20 million and secured an option to buy the business. However, Boston Scientific bought BTG before it had the opportunity to take up its option, which became exercisable in January 2020.

Original Article: (https://www.medtechdive.com/news/Olympus-buys-Veran-for-300M/591708/)