Preventice Solutions, a Minneapolis medical technology firm with a large Rochester presence and deep Mayo Clinic ties, is being purchased by Boston Scientific for $925 million.
Preventice, which evolved out of Rochester’s Boost Information Services, makes a variety of remote cardiac monitoring systems branded as BodyGuardian. BodyGuardian was developed using research licensed from Mayo Clinic.
Preventice's Rochester office is based in Building 003 of the Rochester Technology Campus, formerly known as the IBM campus. About 100 of Preventice's 1,000 employees are based in Rochester.
Preventice started as a developer of medical information smartphone apps, in collaboration with Mayo Clinic and Merck. Then it shifted gears to begin developing wearable cardiac monitors.
The U.S. Food and Drug Administration approved its wireless BodyGuardian monitor to be prescribed to track nonlethal arrhythmia, or irregular heartbeats, in 2012. Boston Scientific became a “significant” investor in 2015, just two years after Preventice began shipping BodyGuardian products.
The company has quickly grown to include a variety of products, including those using artificial intelligence-supported systems. Preventice reported $158 million in net sales in 2020.
On Thursday, Boston Scientific announced that it would be purchasing Preventice in a deal that ”consists of an upfront cash payment of $925 million, and up to an additional $300 million in a potential commercial milestone payment.”
Since Boston Scientific already holds an equity stake of about 22 percent as an investor, the net payment will be about $720 million with “a milestone payment” of up to $230 million.
The deal is expectedly to close by mid-2021.
This follows Boston Scientific's move in 2019 to launch a business accelerator in Rochester as a joint venture with Mayo Clinic. Described as representing the joint commitment of "millions" in dollars by the two healthcare giants, it is based in One Discovery Square complex.
This deal marks a major milestone for Preventice, which had humble beginnings.
In 2018, CEO Jon Otterstatter reflected on the company’s growth from a small start-up with only the four co-founders as employees.
"Now we have 15 times the number of employees as we had at the start. We’re one of the leaders in our industry," said Otterstatter in 2018. "We process 3.3 billion ECG strips a year, and we’re growing."
The Preventice product portfolio includes the BodyGuardian family of remote, wearable cardiac monitors for adult and pediatric patients.
The monitors use “a fully integrated, cloud-based platform supported by an independent diagnostic testing facility, where clinical technicians and artificial intelligence (AI) algorithms provide insights that may lead to improved clinical diagnoses and outcomes.”
Preventice’s expertise fits with Boston Scientific’s expansion into implantable cardiac monitors.
"This acquisition will provide Boston Scientific with a foothold in the high-growth ambulatory electrocardiography space, which strongly complements our recent entrance into the implantable cardiac monitor market and will serve as an important component of our category leadership strategy in cardiac diagnostics and services – a nearly $2B market anticipated to grow double digits annually," said Boston Scientific’s Scott Olson, senior vice president and president of Rhythm Management, in the announcement.