EXHIBIT 99.1
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NEWS BOSTON
FOR IMMEDIATE RELEASE SCIENTIFIC
Boston Scientific Corporation
One Boston Scientific Place
Natick, MA 01760-1537
508.650.8000
www.bostonscientific.com
BOSTON SCIENTIFIC ANNOUNCES ACQUISITION OF
ADVANCED BIONICS CORPORATION
BROAD NEUROSTIMULATION TECHNOLOGY PLATFORM EXPANDS
BOSTON SCIENTIFIC'S REACH INTO MICROELECTRONICS
Natick, MA and Valencia, California (June 1, 2004) - Boston Scientific
Corporation (NYSE: BSX) and Advanced Bionics Corporation, a privately held
company located in Valencia, CA, today announced the execution of a definitive
merger agreement under which Boston Scientific will acquire 100 percent of the
fully diluted equity of Advanced Bionics for an initial payment of approximately
$740 million in cash, plus earn out payments tied to future performance
milestones. The acquisition will expand Boston Scientific's technology portfolio
into the rapidly growing implantable microelectronic device market. Advanced
Bionics has developed implantable microelectronics for treating numerous
neurological disorders. Its neuromodulation technology includes a range of
neurostimulators (or implantable pulse generators), programmable drug pumps and
cochlear implants.
Neuromodulation devices are used to treat chronic conditions such as lower back
pain, hearing loss, urinary incontinence, Parkinson's disease, tremor and
epilepsy. Other applications are currently under development. The total
worldwide market for neurostimulation devices is estimated to be $1.6 billion in
2004 and is expected to grow substantially over the next several years, reaching
approximately $3.8 billion by 2010.
Advanced Bionics was founded in 1993 by Al Mann to develop and manufacture
cochlear implants for profoundly deaf children and adults. The Company is the
industry's technology leader and the only American manufacturer of cochlear
implants. Advanced Bionics has invested more than $100 million during the last
five years to develop less-invasive neuromodulation technology platforms to
treat chronic lower back and leg pain, and plans to use its pioneering
micro-bionic technology to enter the urinary urge incontinence and chronic
headache markets, as well as other markets. The Company has
nearly 100 patents and 200 applications pending. Advanced Bionics employs 550
people in facilities in the United States, Europe and Japan.
Advanced Bionics' neurostimulation devices treat neurological conditions through
the delivery of focused electrical current to targeted nerve fibers. The
implantable devices are wirelessly controlled by the physician or the patient to
deliver the precise timing and amount of electrical current needed to overcome
the patient's disabling condition. Advanced Bionics presently is organized
around three different businesses:
AUDITORY BUSINESS: Advanced Bionics launched its first multichannel cochlear
implant, Clarion(R), in 1996 and currently markets and sells the
HiResolution(TM) Bionic Ear System through a direct sales organization in the
U.S., Europe and Japan. Cochlear implants are the only approved devices capable
of restoring a human sense. The technology consists of an external sound
processor, which captures and processes sound information from the environment
and transmits the digital information through the skin to the implant. The
implant delivers up to 83,000 digital pulses of electrical current to precise
locations on the auditory nerve, which the brain perceives as sound. The
worldwide market for cochlear implants is currently $420 million, and is
expected to grow 12-15 percent over the next five years.
PAIN MANAGEMENT BUSINESS: Advanced Bionics received U.S. Food and Drug
Administration (FDA) approval in April to market its Precision(TM) Spinal Cord
Stimulation System for the treatment of chronic peripheral pain of the lower
back and legs. The Precision system introduces the industry's first rechargeable
battery, allowing longer life than non-rechargeable systems and requiring fewer
replacement surgeries. The Precision is approximately half the size of other
implantable spinal cord stimulators, and features the first patient-directed
fitting system for fast and effective programming. Advanced Bionics expects to
launch Precision this summer into the $425 million-a-year pain management market
with its direct sales force. In addition, Advanced Bionics recently acquired
Medical Research Products, Inc, which designs and develops an implanted
programmable drug delivery pump that is expected to begin its initial clinical
trial for chronic pain in early 2005.
MICROSTIMULATOR BUSINESS: Advanced Bionics' bion(R) microstimulator was
developed for clinical applications requiring significantly smaller implants,
and to reduce the invasiveness of existing therapies. The bion microstimulator
contains a rechargeable battery, sophisticated electronics and stimulating
electrodes in a cylinder only 3 mm x 28 mm and weighing only 0.75 grams. It is
implanted through the use of a needle-like instrument, which leaves behind a
small puncture that can be covered with a bandage. The bion has received CE Mark
approval for use in urinary urge incontinence in Europe and is currently in a
U.S. Phase II clinical study for this indication. FDA pre-market approval is
expected in 2007. Enrollment in a Phase I clinical study for the treatment of
chronic headache has recently begun, and the company is evaluating bion for the
treatment of other neurological conditions.
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The acquisition has been structured to include a substantial earnout mechanism.
Performance milestones are primarily based on the achievement of net sales, with
certain milestone payments also tied to profitability. The milestones are
segmented by the four principal technology platforms (cochlear implants,
implantable pulse generators, drug pumps and bion microstimulators), each with a
72-month earnout horizon.
Base earnout payments approximate two and a quarter times incremental sales for
each annual period. There are also bonus earnout payments available based on the
attainment of certain aggregate sales performance targets and a certain gross
margin level.
The transaction is expected to close within days of this announcement. Boston
Scientific expects the acquisition to be modestly dilutive to earnings per share
(approximately $0.04 and $0.06 in 2004 and 2005, respectively). Advanced Bionics
expects to achieve sales of approximately $82 million in 2004, an annual
increase of 45 percent. It also expects to achieve sales of approximately $128
million in 2005, an annual increase of 56 percent.
Boston Scientific's entry into neuromodulation devices will expand its ability
to reach new clinical markets and may add new therapeutic technologies for its
existing businesses in urology, gastroenterology, cardiovascular and
neurovascular medicine.
"The addition of the Advanced Bionics team to Boston Scientific brings an
expertise in implantable neurostimulation devices that will complement and
enhance our existing less-invasive technologies," said Jim Tobin, President and
Chief Executive Officer of Boston Scientific Corporation. "Advanced Bionics has
a proven product portfolio, an impressive research and development
infrastructure, and an exciting long-term product pipeline. I am particularly
pleased that the Advanced Bionics senior management team, led by founder,
Chairman and Co-CEO Al Mann and President and Co-CEO Jeff Greiner, will continue
to lead the company. I am looking forward to working with them and the rest of
their talented organization."
"The acquisition by Boston Scientific allows us to build on their global sales
and marketing experience," said Al Mann. "I believe the combination of Advanced
Bionics technology platforms and the Boston Scientific entrepreneurial
philosophy is capable of achieving tremendous outcomes for physicians and
patients."
"The platforms we have been developing over the past 10 years should enable
Advanced Bionics to become a major long-term force in the multi-billion dollar
neurostimulation marketplace," said Jeff Greiner.
Merrill Lynch Global Markets & Investment, Inc. and Citigroup Global Markets
Inc. assisted Advanced Bionics in this transaction.
Boston Scientific and Advanced Bionics officials will be discussing the
transaction with analysts on a conference call today at 11:00 a.m. (ET). The
Company will webcast the call to all interested parties through its website
www.bostonscientific.com. Please see the
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website for details on how to access the webcast. The webcast will be archived
and available for a limited period on the Boston Scientific website.
The transaction will not be immediately implemented in Germany pending clearance
from the German Federal Cartel Office.
Boston Scientific is a worldwide developer, manufacturer and marketer of medical
devices whose products are used in a broad range of interventional medical
specialties. For more information, please visit: www.bostonscientific.com.
This press release contains forward-looking statements. The Company wishes to
caution the reader of this press release that actual results may differ from
those discussed in the forward looking statements and may be adversely affected
by, among other things, risks associated with new product development and
commercialization, clinical trials, intellectual property, regulatory approvals,
competitive offerings, integration of acquired companies, the Company's overall
business strategy, and other factors described in the Company's filings with the
Securities and Exchange Commission.
CONTACT: Milan Kofol
508-650-8569
Investor Relations
Boston Scientific Corporation
Paul Donovan
508-650-8541
Media Relations
Boston Scientific Corporation