Sunshine Heart has acquired the Aquadex product line from an indirect subsidiary of Baxter International, a specialist in the hospital products and dialysis markets.
The Aquadex system is indicated for temporary (up to eight hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy, and extended (longer than eight hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy and require hospitalisation.
"Aquadex is an important strategic investment, which allows Sunshine Heart to strengthen our presence in the heart failure market," says John Erb, Sunshine's chairman and CEO. "We believe Aquadex is a valuable and highly complementary technology to our expanding heart failure product portfolio. There is a real need for fluid management in patients both before and following any kind of heart failure procedure. Aquadex is used to treat fluid overload in congestive heart failure patients and can help reduce the length of stay while in the hospital and the number of hospital visits in total."
Under the terms of the agreement, Baxter received USD4.0 million in cash and 1.0 million shares of Sunshine Heart common stock.
"This is a financially attractive transaction as well," says Erb. "We expect this product line to be accretive in the first year with a relatively quick payback period. We plan to strategically leverage our current team of clinical specialists to directly support the existing base of Aquadex customers."
In connection with the acquisition of this product line, the company repaid all amounts outstanding under its existing debt facility with Silicon Valley Bank and entered into a new USD5.0 million facility to finance future working capital needs. Advances under the facility are subject to various conditions precedent, including compliance with financial covenants, which the company does not currently meet.
"This strategic acquisition will allow Sunshine Heart to further drive important advancements to heart failure treatment," says Ben Johnson, managing director of Silicon Valley Bank. "We're excited to provide the financing to support the company as it matures to the next phase of development."
