Boston Scientific Corporation's (NYSE: BSX) acquisition of cardiac arrhythmia treatment solutions developer Rhythmia Medical Inc. for $90 million, and up to an additional $175 million in contingent milestone payments, will benefit the US company's Israeli investors.
Rythmia was founded in 2004 by two expatriate Israelis, co-CEOs Leon Amariglio and Doron Harlev. They have MBA's from Harvard and MIT, respectively, and decided to found the company despite have no experience in the medical devices field. The company is based in Burlington, Massachusetts.
Rythmia's solution is similar to that of Haifa-based Biosense Webster Inc., which was sold to Johnson & Johnson (NYSE: JNJ) for $425 million. A maker of cardiac navigation systems, it is one of Johnson & Johnson's most successful units with more than $500 million in annual sales. Another Israeli company in the field is Haifa-based MediGuide, a maker of navigation systems for minimally invasive procedures, which was sold to St. Jude Medical Inc. (NYSE: STJ) for $300 million in 2008.
In its first financing round, Rythmia raised capital from private investors, mostly Israelis, who knew its co-founders. The investors include former Ceragon CEO Shraga Katz, Aviad Friedman, Elhanan Noam, and real estate tycoon Shir Roichman, who is currently Rythmia's largest shareholder.
Rythmia reportedly raised $20-30 million, giving a three-fold or greater return on investment, which could rise to a nine-fold return if the milestone payments are paid in full and there are royalties.
Published by Globes [online], Israel business news - www.globes-online.com - on October 10, 2012
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