Mergers

1. Mergers, Acquisitions and Partnerships in the Medical Devices Industry

2. The Large Pharmaceutical Companies are Diversifying through Inorganic Growth Although pharmaceutical companies have been interested in diversifying into medical devices for some time, it has never been as apparent and significant as it has been in recent years as the industry has witnessed mega deals. With many blockbuster drugs such as Lipitor losing their patents and consequent reduced profitability, pharmaceutical companies have been looking to diversify and add stability to their portfolios by acquiring medical device companies. Specialty medical devices offer higher margins and have shorter product development times which makes them the ideal choice for pharmaceutical companies trying to cope with pressures from declining bottom lines. For more information, please click or add the below link to your browser: http://www.globaldata.com/reportstore/Report.aspx?ID=Mergers-Acquisitions-and-Partnerships-in-the-Medical-Devices-Industry-Inorganic-Growth-Driven-by-the-Strategic-Need-to-Hold-a-Diversified-Portfolio&ReportType=Industry_Report&coreindustry The most significant deal in the year 2010 is Novartis’ acquisition of Alcon. For a purchase consideration of approximately $28.1 billion, a significant ophthalmic device product portfolio was added to Novartis’ existing contact lens and eye care pharmaceutical product base. Through this acquisition, Novartis plans to create a new global eye care division, accounting for more than 70% of all products in the global vision care market. Likewise in the year 2008, Johnson & Johnson acquired Mentor, a world leader in breast implants, and strengthened its surgical portfolio with the addition of medical aesthetic devices. Abbott acquired Advanced Medical Optics (AMO) in the year 2009 for a purchase consideration of $2.8 billion to add ophthalmic devices products to its existing pharmaceutical and diagnostics portfolio. Consolidation in the Electrophysiology Market The atrial fibrillation market has become attractive with the growing prevalence of atrial fibrillation cases. Moreover, currently the market is vastly underserved, with only 30% of the electrophysiologists performing ablation regularly. This provides an opportunity for the cardiovascular giants to tap into the market through the acquisition of small companies with niche technologies in the cardiac ablation market.

3. Thus, the cardiovascular devices market has seen consolidation in the electrophysiology segment with major companies such as Medtronic, St Jude and Boston Scientific acquiring companies to strengthen their atrial fibrillation product portfolios. Boston Scientific acquired CryoCor for a value of $17.6m; Medtronic acquired CryoCath and Ablation Frontiers for $13.3m and $225m respectively whilst St. Jude added EP Med Systems to its basket for a purchase consideration of $91m. For more information, please click or add the below link to your browser: http://www.globaldata.com/reportstore/Report.aspx?ID=Mergers-Acquisitions-and-Partnerships-in-the-Medical-Devices-Industry-Inorganic-Growth-Driven-by-the-Strategic-Need-to-Hold-a-Diversified-Portfolio&ReportType=Industry_Report&coreindustry Cardiovascular Device Companies Foraying into the Neurology Market Neurostimulation, with its vast potential for applications in various indications and a high growth interventional neurology devices market, have attracted cardiovascular companies into the neurology devices market. Companies including Medtronic, Boston Scientific and ev3 have acquired companies to add neurology devices to their product base. ev3 acquired Chestnut Medical for a value of $150m and completed its neurovascular portfolio by adding products such as the Pipeline Embolization Device (PED) for the treatment of cerebral aneurysms and the Alligator Retrieval device for foreign body retrieval. Similarly, Medtronic acquired NDI medical for $42m and added the latter’s neurostimulation device for incontinence care to its portfolio whilst St. Jude Medical strengthened its neurology devices portfolio by adding Northstar Neurosciences for $2m. Top Three of Diagnostic Imaging Companies, GE Healthcare, Philips Healthcare and Siemens Healthcare, Looking at Holding a Diversified Portfolio Diagnostic imaging companies have been trying to diversify from their core capabilities and to not get restricted to the capital equipment business segments. The year 2007 was a significant year for

4. companies such as Siemens and Philips which changed the way diagnostic imaging companies operate. Siemens acquired Dade Behring as an extension to its earlier entry into in-vitro diagnostics with Bayer Diagnostics. Siemens acquired Dade Behring for a purchase consideration of $7 billion thus strengthening its diagnosis value chain by being able to offer both the complete range of in-vivo and in-vitro diagnostics products. For more information, please click or add the below link to your browser: http://www.globaldata.com/reportstore/Report.aspx?ID=Mergers-Acquisitions-and-Partnerships-in-the-Medical-Devices-Industry-Inorganic-Growth-Driven-by-the-Strategic-Need-to-Hold-a-Diversified-Portfolio&ReportType=Industry_Report&coreindustry Philips acquiring Respironics was one of the significant deals in the medical device industry, which made the company a leader in the home healthcare devices market that included devices for diagnosis and the treatment of sleep apnea. The Phillips – Respironics deal was worth $5.1 billion, following which Respironics has become an indirect wholly owned subsidiary of Philips. GE Healthcare Acquired Vital Signs for a value of $990.3m, with the company’s product portfolio including primarily single-use medical products for the anesthesia, respiratory/critical care, interventional cardiology/radiology and sleep/ventilation markets. Spinal Surgery Companies Acquiring Companies with Non-Fusion Technologies Driven by ageing populations and rapid technological innovation, the spinal surgery market has been undergoing changes that have resulted in spinal non-fusion and motion preservation technologies gaining greater importance in recent years. A reflection of this phenomenon is the number of acquisitions taking place in this market. NuVasive acquired Cervitech for a purchase consideration of $81m and strengthened its artificial disc replacement product portfolio. Integra Spine acquired Theken along with its other group of companies for $47m to gain the existing and valuable pipeline product portfolio of Theken, thus strengthening its position in the spinal surgery market. Synthes acquired N Spine, a manufacturer and marketer of devices to treat lumbar spinal disorders, for a total purchase consideration of $77m to expand its core pedicle screw business.

5. Investments in the global medical devices industry exceeded $73 billion in 2009. In the same year, $18.7 billion worth mergers & acquisitions (M&A) including asset transactions were carried out. While the industry actually witnessed a decline in the value of investments and M&As in 2009, the last couple of years had been startlingly dynamic for the global medical devices industry. One trend that was clearly visible was Big Pharma’s increasing interest in medical device companies. Abbott’s acquisition of Advanced Medical Optics (AMO), Johnson & Johnson’s (J&J) acquisition of Mentor Corporation are some key examples. GlobalData’s report, “Mergers, Acquisitions and Partnershipsin the Medical Devices Industry - Inorganic Growth Driven by the Strategic Need to Hold a Diversified Portfolio” provides key data, information and analysis on the intra and inter-industry consolidation activity involving medical device companies. The report is supplemented with data and insight on key mergers, acquisitions, strategic partnerships and licensing agreements carried out in the last few years. The report also provides information on the strategic rationale behind each deal, the post-deal impact analysis and what could it mean to the industry and the competitive landscape. For more information, please click or add the below link to your browser: http://www.globaldata.com/reportstore/Report.aspx?ID=Mergers-Acquisitions-and-Partnerships-in-the-Medical-Devices-Industry-Inorganic-Growth-Driven-by-the-Strategic-Need-to-Hold-a-Diversified-Portfolio&ReportType=Industry_Report&coreindustry Or visit our report store: http://www.globaldata.com/reportstore Contact Information: Rajesh Gunnam rgunnam@globaldata.com +914066166782