Covidien buys PAD device maker

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Covidien has signed a definitive agreement to acquire CV Ingenuity, a company that provides technologies to relieve vascular obstructions, inhibit restenosis and allow natural vessel healing in patients with peripheral arterial disease (PAD).

The companies expect to complete the acquisition in the first calendar quarter of 2013. Financial terms of the transaction were not disclosed.

The Fremont, Calif.-based CV Ingenuity said its core technology, while still in the investigational phase, is a drug-coated balloon (DCB) platform with a proprietary, rapid-release system.

As a result of this transaction, Covidien said it expects to increase research and development expenditures for the next several years to fund the clinical development of CV Ingenuity technologies. Additional expenditures are expected to be more than $20 million in the second half of fiscal 2013 and more than $30 million in fiscal 2014. Despite these additional expenditures and the negative impact on selling, general and administrative expenses from the transaction, Covidien is reaffirming all of its prior guidance ranges, which were last updated on Nov. 9. Also, Covidien does not anticipate receiving FDA approval for a DCB product using the CV Ingenuity technology until fiscal 2017.

Once the transaction has been completed, Covidien will report the CV Ingenuity business as part of its vascular product line in the medical devices segment.