J&J builds in medtech with $13.1bn Shockwave buy

Johnson & Johnson

Johnson & Johnson has reached a deal to acquire Shockwave Medical for around $13.1 billion, expanding its position in medical devices used to treat heart disease.

J&J has agreed to pay $335 per share in cash for Santa Clara, California-based Shockwave, which specialises in intravascular lithotripsy (IVL) technology for the treatment of calcified blood vessels in coronary artery disease (CAD) and peripheral artery disease (PAD).

IVL is a minimally invasive procedure that uses sound waves to destroy the calcified lesions, which can reduce blood flow and cause pain or heart attack. At the moment, Shockwave is the only company with IVL systems on the market, generating $730 million in revenues in 2023, up 49% on the prior year.

Shockwave recently diversified, however, with the $100 million acquisition last year of Neovasc, a company that has developed a medical device to reduce pain and other symptoms associated with refractory angina.

The new acquisition – which includes Shockwave’s acquired cash, more than $990 million at the end of 2023 – continues J&J’s drive to build its presence in medtech and pharmaceuticals though M&A. It is the company’s largest transaction since it bought heart pump manufacturer Abiomed for $16.6 billion at the end of 2022.

The company has described having a “voracious” appetite for takeovers that has been facilitated in part by the spinout of its consumer health division – now called Kenvue – via an initial public offering (IPO) last year that generated more than $13 billion in cash for J&J.

Since then, the company has also added to its pharma portfolio with the purchase of cancer antibody specialist Ambrx Biopharma for $2 billion, which went through last month. It also signed around 50 smaller licensing deals and partnerships to boost its R&D capabilities and pipeline during 2023.

“With our focus on innovative medicine and medtech, Johnson & Johnson has a long history of tackling cardiovascular disease – the leading cause of death globally,” commented the company’s chief executive, Joaquin Duato.

“The acquisition of Shockwave and its leading IVL technology provides a unique opportunity to accelerate our impact in cardiovascular intervention and drive greater value for patients, shareholders, and health systems,” he added.