Oct. 29--A week ago, Abbott Laboratories CEO Miles White said he wanted to improve the company's medical devices arm after weak third-quarter earnings. Today, the company announced its first move.
Abbott announced Wednesday it will expand its medical device business with the purchase of a California-based company that specializes in products that treat heart rhythm disorders.
Abbott will buy Topera for $250 million upfront, with potential future payments based on performance. Abbott said it also secured in the contract the right to buy another California company, Advanced Cardiac Therapeutics, in the future. That company is developing a technology to increase safety for heart rhythm disorder treatments. Financial terms were not disclosed for that possible future deal.
The north suburban-based maker of infant formula, medical devices and drugs reported third-quarter earnings that declined 44 percent from a year earlier. White said in a call with investors that the company's medical devices arm accounted for $1.3 billion in sales in the third quarter, down 1 percent from a year earlier.
White has shaken up the company's portfolio in recent years. He spun off the company's proprietary pharmaceuticals arm AbbVie in 2013, acquired a Chilean generic pharmaceuticals company this year, plans to close a deal to buy a Russian pharmaceuticals company by year's end and will sell Abbott's European generic drugs business early next year.
John Capek, executive vice president of medical devices for Abbott, said a growing aging population makes the heart rhythm disorders field of medicine an attractive opportunity for the company. About 30 million people worldwide suffer from irregular heart beats, Capek said.
The Topera technology helps doctors better identify where in the heart the problem is, which allows them to target those areas with energy meant to disrupt the fluttering heart pattern. The diagnostic equipment received Food and Drug Administration approval in 2013.
"I think it really does come down to there's a significant number of patients who have this atrial fibrillation who are in need of a therapy," Capek said. "This is a very exciting technology to enable this and we're excited to get into this growing market segment."
The transaction is subject to antitrust clearance and is expected to close by the end of the year. The acquisition should not affect the company's full-year 2014 earnings forecast.
The new business will be led by Michael Pederson, who was previously president and CEO of VytronUS, a private medical device company also based in California.
ehirst@tribune.com
Twitter: @ellenjeanhirst
