Johnson & Johnson looks to expand medical device portfolio
Global company Johnson & Johnson has announced plans to acquire Shockwave. The parties are currently negotiating the details of the deal. The amount of the acquisition will be USD 12 billion.
Analysts note that more applicants may emerge in the agreement process to purchase a promising medical device manufacturer. In April 2024, Bloomberg stated that the company was interested in Boston Scientific. However, there was no further information on the possible deal.
Experts estimated Shockwave’s market value at USD 11 billion. However, following J&J’s statement, the medical device company’s shares rose 10% by the end of trading. They rose a further 1.5% in after-hours trading. As a result, their value reached more than USD 316 per share. This took Shockwave’s market capitalisation to more than USD 12 billion.
According to the experts at Leerink Partners, J&J is very interested in acquiring the manufacturer. Shockwave has the best product portfolio in its segment, for which demand is growing rapidly. Company metrics:
– 2023 revenue of more than USD 730 million;
– growth over 2022 was 49%;
– analysts forecast the manufacturer’s 2024 sales to be between USD 910 million and USD 930 million;
– year-on-year growth will be around 25-27%.
As for Johnson & Johnson, the company’s acquisition will be its second most expensive in several years. In 2022, it acquired Abiomed for USD 16.6 billion. The latter is a manufacturer of cardiovascular devices. Shockwave is also active in the IVL market, especially in intravascular lithotripsy.
In this way, J&J intends to expand its medical focus. The company is focusing on the promising market for the treatment of cardiovascular diseases, which are among the leading causes of death in developed countries.
Overview of Shockwave’s business
Shockwave is a US-based medical device company. Its chairman and chief executive is Douglas Godshall. The company made an initial public offering in 2019.
The manufacturer specialises in the interventional treatment of cardiovascular diseases. The company develops proprietary technology to remove calcified plaques. IVL catheters gently but effectively target damaged arteries. They use sound waves to destroy hardened calcium deposits. Soft tissue is not damaged. After breaking up the plaque, the device widens the diameter of the damaged artery and restores blood flow.
Needham analysts estimate that Shockwave’s IVL technology has opened up a new sector. Experts estimate the market for the treatment of calcified disease to be more than USD 8.5 billion. However, companies have only tapped into 6% of the market.
