Shoreview medical device maker Torax Medical is being acquired by a subsidiary of health care giant Johnson & Johnson Co. in a transaction of an undisclosed price.
Johnson & Johnson subsidiary buys Torax Medical
The acquisition follows last year's $25 million financing round.
February 20, 2017 at 10:20PM
Torax will be acquired by JNJ surgical technology subsidiary Ethicon. The deal is expected to close by April 1.
Last year JNJ venture-capital subsidiary Johnson & Johnson Innovation — JJDC — led a $25 million Series E financing round for Torax. Mayo Clinic Ventures is another Torax funder.
Torax is known for making medical devices that use loops of linked titanium beads whose magnetic cores simulate the forces of the body's sphincter muscles in the gut and anus. The precisely calibrated bead loops encircle the esophagus or anal sphincter to minimize involuntary opening while allowing them to give way when necessary.
The Food and Drug Administration approved Torax's best-known device, the Linx Reflux Management System for gastroesophageal reflux disease (GERD), back in 2012. Despite gathering strong clinical data, Torax struggled to gain insurance coverage for the device, which meant it wasn't widely available even if patients with severe acid reflux requested it.
Last year the Health Care Service Corp. — which includes Blue Cross affiliates in Illinois, Montana, New Mexico, Oklahoma and Texas — announced a coverage policy that made the Linx available to 15 million plan members. The American Medical Association also created a procedure code for the Linx procedure last year.
The FDA approved another Torax device in late 2015 called the Fenix, which is used to treat fecal incontinence.
Both the Linx and Fenix are only available as second-line options for patients who have failed or are not eligible for other treatment options.
The funding is expected to give more than 5,000 Minnesotans, especially in rural areas, high-speed broadband access across the state and help at least 139 businesses and 368 farms.
