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St. Jude Medical Announces Definitive Agreement To Acquire NeuroTherm

St. Jude Medical, Inc. (NYSE: STJ), a global medical device company, today announced that it has signed a definitive agreement to acquire privately held NeuroTherm, Inc., a manufacturer of interventional pain management therapies, for approximately $200 million in cash.

NeuroTherm is a global leader in the treatment of spinal pain using radiofrequency ablation (RFA), a segment of the chronic pain market in which St. Jude Medical does not currently participate. The company expects to complete this transaction by the end of the third quarter, subject to customary closing conditions. NeuroTherm is expected to add approximately $10 million to $15 million to St. Jude Medical’s 2014 sales. Excluding acquisition-related expenses, this transaction will be neutral to St. Jude Medical’s consolidated earnings per share in 2014 and accretive thereafter on a GAAP basis.

“NeuroTherm’s radiofrequency ablation products are an ideal complement to St. Jude Medical’s chronic pain portfolio, providing our global sales force with additional interventional pain therapies that offer potential relief to patients earlier in the chronic pain continuum,” said Michael T. Rousseau, chief operating officer of St. Jude Medical. “As the only medical device manufacturer with both RFA and spinal cord stimulation, this acquisition will enable us to offer more treatment options to patients worldwide who suffer from the debilitating effects of chronic pain.”

Chronic pain affects approximately 1.5 billion people worldwide — more than heart disease, cancer and diabetes combined. The burden of chronic pain carries an economic price tag of $300 billion annually in the U.S. and costs €300 billion to European health care systems. In 2013, there were 230 million Americans diagnosed with acute and chronic pain; only about 8 percent of these patients received interventional therapy.

RFA is a minimally invasive procedure that is designed to reduce back pain by interrupting the nerve supply from painful facet joints in the neck or back. RFA involves the pinpoint application of heat to destroy the painful nerve or nerves. The treatment has been used for over 25 years and provides interventional pain therapy to patients earlier in the chronic pain continuum, often prior to neurostimulation or surgical intervention.

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