Johnson & Johnson aims to add a fourth cardiac business to its portfolio in less than two years with the acquisition of V-Wave Ltd., which makes the Ventura interatrial shunt system for the treatment of heart failure. J&J will pay $600 million up front and an additional $1.1 billion contingent on meeting specified regulatory and commercial milestones. The deal is slated to close before the end of the year.

The transaction continues J&J’s movement into the higher growth and rapidly expanding markets for cardiovascular treatment which motivated the acquisitions of Abiomed Inc. for $16.6 billion in November 2022, Laminar Inc. for $400 million (plus undisclosed contingent payments) in November 2023 and Shockwave Medical Inc. for $13 billion this April.

J&J CEO Joaquin Duato noted in an investor call in April that the company intended to continue to look for major M&A opportunities to promote long-term growth. Staking a position in the heart failure market meets that goal.

Heart failure affects approximately 6.7 million people in the U.S., a number that is expected to rise to 8.5 million by the end of the decade. The average adult in the U.S. has a one in four chance of developing the disease, which is highly associated with metabolic dysfunction and related diseases including hypertension, obesity and diabetes.

Heart failure (HF) takes two primary forms. In heart failure with preserved ejection fraction, diastolic heart failure, the heart contracts normally, but the ventricles fail to relax normally during ventricular filling. In heart failure with reduced ejection fraction (HFrEF) or systolic HF, the heart does not contract properly, sending less oxygenated blood through the body.

The ejection fraction is the amount pumped out divided by the amount of blood in the heart. A normal or preserved ejection fraction is 50% to 70%, while borderline EF is 41% to 49% and reduced EF indicates that less than 40% of the blood in the heart is pumped out during each contraction.

About 800,000 people in the U.S. have HFrEF, the condition for which the Ventura interatrial shunt system appears to be most effective based on results of the RELIEVE-HF trial presented at the American College of Cardiology conference in April.

“We are excited to welcome V-Wave to Johnson & Johnson Medtech and to take another meaningful step toward transforming the standard of care for cardiovascular disease,” said Tim Schmid, executive vice president and worldwide chairman of J&J Medtech. “We recognize the importance of identifying more diverse and effective treatments for heart failure, and our recent track record demonstrates our focus on accelerating our impact on the most urgent and pressing unmet needs.”

J&J anticipates that the deal will dilute adjusted earnings per share by approximately 24 cents in 2024 and 6 cents in 2025. Management will provide an update to its guidance for full year 2024 when it reports its third quarter results on October 15.

As part of J&J Medtech, V-Wave will report to Michael Bodner, group president, heart recovery & intravascular lithotripsy.