Neovasc Inc (US) (NASDAQ:NVCN) investors are overwhelmingly excited today after the medical device maker announced that Boston Scientific Corporation (NYSE:BSX) has agreed to acquire Neovasc’s tissue processing technology and facility for approximately US$67,909,800. Concurrently, Boston Scientific has committed to invest an additional US$7,090,200 in Neovasc for a 15% equity interest in the Company. Neovasc intends to use the proceeds of these transactions for general corporate purposes.
Neovasc shares reacted to the news, skyrocketing nearly 104% to $1.05 in pre-market trading Friday.
“Boston Scientific has been a long-term customer of Neovasc, having historically represented a sizeable percentage of our tissue processing revenues,” commented Neovasc CEO, Alexei Marko. “As one of the world’s premier device companies, with a global cardio-vascular franchise, this investment in Neovasc enables continued development of our lead products, Reducer and Tiara, and strengthens our resolve to revolutionize how structural heart disease is treated.”
Under the terms of the equity investment, Boston Scientific has agreed to purchase 11,817,000 common shares in the capital of Neovasc (the “Common Shares”) at a price of US$0.60 per Common Share, for gross proceeds of US$7,090,200, subject to required regulatory approvals, including approval of the Toronto Stock Exchange.
Under the terms of the asset purchase agreement Neovasc has been granted a license to the purchased assets and access to the sold facilities to allow it to continue its tissue and valve assembly activities for its remaining customers, and continue its own tissue-related programs, including advancing its mitral bioprosthesis valve Tiara™ through its clinical and regulatory pathways. The transaction is expected to close by year-end 2016, subject to customary closing conditions. (Original Source)
On the ratings front, Neovasc has been the subject of a number of recent research reports. In a report issued on November 15, Leerink Swann analyst Danielle Antalffy reiterated a Buy rating on NVCN, with a price target of $10, which represents a huge upside of 1846% from where the stock is currently trading. Separately, on August 10, Canaccord’s Jason Mills reiterated a Buy rating on the stock .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Danielle Antalffy and Jason Mills have a yearly average return of 2.4% and a loss of 2.3% respectively. Antalffy has a success rate of 48% and is ranked #1311 out of 4239 analysts, while Mills has a success rate of 49% and is ranked #3724.
Neovasc, Inc. operates as a specialty medical device company that develops and manufactures products for the rapidly growing cardiovascular device marketplace. Its products include the Neovasc Reducer for the treatment of refractory angina, the Tiara technology in development for the transcatheter treatment of mitral valve disease and a line of advanced biological tissue products that are used as key components in a variety of third-party medical products, such as vascular surgical patches and transcatheter heart valves. The company also offers pericardial tissue processing, vascular product development, design and manufacturing solutions to industry partners.