Johnson & Johnson to buy Auris Health for $3.4bn

April 2019 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

April 2019 Issue

As part of its continuing focus on creating the next frontier of digital surgery, Johnson & Johnson is to buy Auris Health’s robotic platform in a $3.4bn cash deal. Additional contingent payments of up to $2.35bn may be payable upon reaching certain predetermined milestones.

The definitive agreement will accelerate Johnson & Johnson’s creation of a connected digital ecosystem centred on using data to improve patient outcomes that leverages world-class robotic technology. This ecosystem will empower patients to take charge of their health, guide surgeons through procedures and help them advance their skills and enable healthcare systems to deliver more consistent procedures, while also managing costs.

“In this new era of health care, we are aiming to simplify surgery, drive efficiency, reduce complications and improve outcomes for patients, ultimately making surgery safer,” said Ashley McEvoy, executive vice president, worldwide chairman, medical devices at Johnson & Johnson. “We believe the combination of best-in-class robotics, advanced instrumentation and unparalleled end-to-end connectivity will make a meaningful difference in patient outcomes.”

Founded in 2007, Auris Health is a privately held developer of robotic technologies. The robotic medical company focuses on lung cancer with a Food and Drug Administration (FDA)-cleared platform currently used in bronchoscopic diagnostic and therapeutic procedures.

“We are thrilled to be joining Johnson & Johnson to help push the boundaries of what is possible in medical robotics and improve the lives of patients across the globe,” said Frederic Moll, chief executive and founder of Auris Health. “Together, we will be able to dramatically accelerate our collective product innovation to develop new interventional solutions that redefine optimal patient outcomes.” Mr Moll will join Johnson & Johnson upon completion of the transaction.

The world’s largest and most broadly-based healthcare company, acquirer Johnson & Johnson is continuously working to disrupt medical innovation. With Auris Health’s current focus on lung cancer, the Monarch Platform robotic technology will play an important role within the Lung Cancer Initiative at Johnson & Johnson (LCI), enabling the development of a differentiated digital solution that addresses key steps in the lung cancer care journey, from diagnosis to early stage intervention, that are central to the company’s commitment to develop solutions that prevent, intercept and cure.

“This combination is a testament to the incredible work of the Auris Health team and the innovation engine behind the Monarch Platform, which represents a huge step forward in endoluminal technology,” continued Mr Moll. “We look forward to continuing to shape the future of intervention with the added expertise and resources of the world’s largest healthcare organisation.”

In addition to advancing focused initiatives to combat lung cancer, Auris Health’s technology will support Johnson & Johnson’s vision of being a world leader across the continuum of surgical approaches, including open, laparoscopic, robotic and endoluminal. The transaction is also complementary to the acquisition of robotic technology for orthopaedics and the continued development of the Verb Surgical Platform, through a strategic partnership with life sciences research company Verily.

“We are very committed to our partnership with Verily on the development of the Verb Surgical Platform,” added Ms McEvoy. “Collectively, these technologies, together with our market-leading medical implants and solutions, create the foundation of a comprehensive digital ecosystem to help support the surgeon and patient before, during and after surgery.”

The transaction is subject to antitrust clearance and other customary closing conditions and is expected to close by the end of the second quarter of 2019.

Fraser Tennant