The deal enables Medtronic to leverage its expertise in implantable pacing and neurostimulation devices and in treating diabetes.Minneapolis-based Medtronic (NYSE: MDT) will buy Mount Arlington”s Transneuronix for an initial payment of $260 million.
Transneuronix is developing a gastric pacemaker for treating obesity. The company has been working closely on the pacemaker with Medtronic, which was a minority investor.
Medtronic said the deal enables it to leverage its expertise in implantable pacing and neurostimulation devices and in treating diabetes, a major complication related to obesity.
Physicians implant the pocket-watch sized “stomach pacemaker” by making a small incision in the patient”s abdomen and placing the battery-generator below the skin. A tiny wire is attached to the outer surface of the stomach, where a continual electrical impulse stimulates nerve endings to trick the brain into feeling full. The cost of the procedure, including the device, will likely be in the $15,000 to $25,000 range.
The device is not intended as a “magic bullet” to cure obesity, but as part of a weight reduction program, the company said.
The device is undergoing a key clinical trial and results are expected by this fall. Medtronic could seek FDA approval by the end of the year and the device could hit the U.S. market early in 2007. Medtronic is also working on a brain stimulation device that could treat obesity.
At 12:45 p.m. Medtronic shares were down $0.13 to $52.07.
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