SAN DIEGO, May 19 Volcano Corporation(Nasdaq: VOLC), a provider of intravascular ultrasound (IVUS), functionalmeasurement (FM) and Optical Coherence Tomography (OCT) products designed toenhance the diagnosis and treatment of coronary and peripheral vasculardisease, said today that it has acquired Novelis, Inc., a privately-heldcompany with proprietary ultrasonic visualization and therapy technology forminimally invasive diagnostic and therapeutic devices.
Novelis' proprietary Forward-Looking IVUS technology platform is expectedto build upon Volcano's existing suite of products and further enhanceVolcano's position as an imaging technology leader in the field ofinterventional medicine by enabling forward-looking IVUS and associatedtherapies in the interventional cardiology market. Volcano expects to add theNovelis products and capability onto its s5i multi-modality integratedplatform/hub.
Novelis' core product line is based on Forward-Looking IntravascularUltrasound (FLIVUS) technology. The product line includes an image-guidedcrossing catheter that combines visualization, steerability and RF tissueablation, which is designed to permit Interventional Cardiologists to safelycross chronic total occlusions ("CTO") in the coronary and peripheralarteries, and a forward-looking IVUS catheter (imaging-only version) tofacilitate current guidewire-based CTO crossing techniques as well as otherpotential product offerings with possible applications outside of vascularmedicine. This platform technology may have applications for numerousminimally invasive procedures including plaque modification in the coronary orperipheral arteries, guidance in structural heart procedures, includingcardiac ablation guidance and therapy, breast biopsy guidance and therapy, andorthopedic (spine) guidance and therapy.
Under the terms of the agreement, Volcano paid approximately $12 millionin cash at closing. In addition, Volcano may make an additional cash paymentof $3 million based on the achievement of a specific regulatory milestone.
"As was the case with our acquisition of CardioSpectra's OCT business, theNovelis offering represents a highly complementary technology to our IVUSoffering. By adding new modalities, we will leverage the Volcano integratedimaging suite provided by our s5i integrated platform and expect to driveinstalled-base growth and per-procedure utilization as we address sizeabletherapy markets that are estimated to be in the hundreds of millions ofdollars," said Scott Huennekens, president and chief executive officer ofVolcano.
"Novelis' proprietary technology has potential applications for a numberof minimally invasive diagnostic and therapeutic applications in the coronaryand peripheral arteries, including the treatment of CTOs. It is estimatedthere are currently over 200,000 CTOs performed in the U.S., Europe and Japaneach year. These procedures, which remain one of the most challenging issuesfaced by interventionalists today, often fail or take hours to successfullycomplete due to inadequate visualization. Furthermore, due to the lack ofadequate tools for CTO crossing, many interventionalists simply refer patientswith CTOs to highly invasive and costly coronary artery bypass grafting (CABG)procedures. The products under development by Novelis have the potential toshorten procedure times and minimize complications plus dramatically add tothe total number of procedures being performed -- enabling patients with CTOsto be treated in the cath lab rather than in the surgery suite. At theestimated procedure volume of over 200,000 cases per year -- and factoring inthe potential for market expansion -- the total market potential for Novelis'CTO products is estimated at over $500 million," he added.
"We believe the regulatory path is fairly straightforward in all majorgeographies and that this offering will leverage our strong