St. Jude May Invest $25 Million in ProRhythm

A number of agreements with St. Jude Medical, Inc. (St. Paul, MN, USA), have been announced by ProRhythm, Inc. (Setauket, NY, USA), formerly known as Transurgical.

These agreements provide that under certain conditions St. Jude Medical will make two U.S.$12.5 million minority investments in ProRhythm, which are anticipated to occur in 2005. They also provide that St. Jude Medical has the exclusive right to acquire ProRhythm for $125 million in cash, with additional cash payments payable to the ProRhythm shareholders after the completion of an acquisition if ProRhythm achieves certain performance-related milestones. St. Jude is not obligated to exercise this acquisition right, which extends to March 31, 2007.

In addition, the two companies have agreed to collaborate on the continuing development of ProRhythm's high-intensity focused ultrasound (HIFU) ablation system for the treatment of atrial fibrillation (AF). St. Jude also obtained distribution rights for ProRhythm's HIFU ablation system in the European Union. St. Jude will provide original equipment manufacturer (OEM) services to ProRhythm for a portion of the company's products.

The AF ablation procedure utilizes ProRhythm's proprietary balloon catheter, which is inserted through a vein in the leg of the patient and advanced into the left atrium of the heart. Contolled, discrete ablation lesions around the pulmonary veins, created with the HIFU catheter, are intended to prevent unwanted electrical impulses from disrupting the heart's normal rhythm. HIFU has the potential to reduce unwanted side effects of the procedure, such as the formation of clots and stroke.

"I am optimistic that this partnership will rapidly commercialize our HIFU system, and serve to establish HIFU ablation as the first choice for catheter-based treatment of atrial fibrillation,” said Reinhard Warnking, president and CEO of ProRhythm.





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