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Boston Scientific, Farapulse Sign Deal for Treatment of AF

Zacks Equity Research
·4 min read

Boston Scientific Corporation BSX signed an investment agreement with an exclusive option to acquire Farapulse, Inc, a privately-held company developing a pulsed field ablation (“PFA”) system. The agreement has been signed to enhance the treatment of atrial fibrillation (“AF”) and other cardiac arrhythmias.

The Farapulse platform, which is an investigational device not available for sale, uses an ablation method based on pulsed electric fields (also known as irreversible electroporation) to regularize the electrical signals and prevent AF.

For investors’ note, Farapulse is pursuing regulatory approval in the United States and CE Mark approval in Europe. It has also received the FDA’s Breakthrough Designation for its endocardial ablation system in May 2019.

With the latest agreement, Boston Scientific aims to strengthen its position in the Electrophysiology business on a global scale. Notably, the Electrophysiology business is a component of the company’s broader Rhythm and Neuro arm.

Rationale Behind the Agreement

AF is a common heart rhythm disorder affecting more than 33 million people worldwide. These patients are often treated with anti-arrhythmic drugs as well as cardiac ablation therapy.

However, the Farapulse platform via the PFA system enables the physicians to only ablate the required tissue and spare nearby tissue from unintentional ablation. The PFA system creates a therapeutic electric field instead of using thermal energy sources such as radiofrequency ablation or cryoablation.

Recent study results have illustrated the effectiveness of the tissue-selective Farapulse PFA technology approach for treatments using cardiac ablation.

Per Boston Scientific’s management, the expanded investment in this technology along with its cryoablation and contact force catheters with local impedance technology will offer physicians an innovative and comprehensive portfolio of electrophysiology products as well as services.

Industry Prospects

Per a report by ReportLinker, the global cardiac ablation market is expected to grow from $1,633.8 million in 2019 to $3,482.39 million by the end of 2025, witnessing a CAGR of approximately 13.4%. Rising cases of cardiovascular disease, growing demand for minimally invasive technology and higher awareness for effective treatment alternatives are expected to drive the market.

Given the market potential, Boston Scientific’s investment in the PFA technology will significantly boost its business.

Recent Developments in Rhythm and Neuro Arm

Of late, Boston Scientific witnessed some important developments in its Rhythm and Neuro segment.

The company announced the receipt of the CE Mark and the subsequent limited-market launch of its fourth-generation Vercise Genus Deep Brain Stimulation System in Europe this month.

In July, Boston Scientific received the FDA510(k) clearance for its LUX-Dx Insertable Cardiac Monitor System.

In June, the company announced the U.S. launch of its tool for monitoring the effect of radiofrequency energy delivery, the DIRECTSENSE Technology. The launch was preceded by its FDA approval in April. This launch is expected to provide a significant boost to the company’s Electrophysiology business, which is a segment of the broader Rhythm and Neuro arm.

In May, Boston Scientific announced the final results from the UNTOUCHED study of the EMBLEM Subcutaneous Implantable Defibrillator System.

Price Performance

Shares of the company have gained 18.1% in the past six months compared with the industry’s 14.7% rise and the S&P 500’s 23.2% rise.

Zacks Rank & Key Picks

Currently, Boston Scientific carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are QIAGEN N.V. QGEN, Thermo Fisher Scientific Inc. TMO and Hologic, Inc. HOLX.

QIAGEN’s long-term earnings-growth rate is estimated at 22.3%. It currently flaunts a Zacks Rank #1. (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher’s long-term earnings-growth rate is estimated at 15.5%. It currently carries a Zacks Rank #2 (Buy).

Hologic’s long-term earnings-growth rate is estimated at 16.4%. The company presently sports a Zacks Rank #1.

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