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CASE STUDIES
Case Study: Advanced Stent Technologies
AST is a medical device company that began operations in late 1998. The company’s focus was to design, manufacture and distribute a dedicated coronary bifurcation stent system that gave cardiologists a safe, effective and easy-to-use method for treating coronary bifurcation blockages.
Finistere Partners’ Jay Brumfield and Jerry Caulder joined AST in summer 2003 as the President/CEO and Chairman of the Board respectively. They spearheaded the effort which led to Boston Scientific Corporation’s acquisition of AST in March 2005 for US$120 million plus undisclosed additional contingent payments. Deal structures, such as the AST/BSC transaction, which create incremental future deal value upon reaching targeted milestones are quite common in the medical device sector and offer further upside to our investors.
Changes Key to AST turnaround
AST went through difficult times between its start up in 1998 and the summer of 2003 and lacked a specific exit strategy – not an uncommon problem for a start up company. Upon arriving at AST, Jay and Jerry initiated several strategic changes that played an essential role in the company’s ultimate success. These changes included:
- Downsizing the employee base by approximately 50% in order to save valuable cash resources and allow the remaining employees to better focus their efforts.
- Abandoning the company’s first generation SLK-View® stent system and focusing exclusively on the development of its next generation Petal™ stent system.
- Recruiting (a) an outstanding Board with experience operating start-up companies and connections to larger medical device players (potential suitors) and (b) key opinion leaders in the interventional cardiology community to assist in the development of the Petal™ stent system.
- Initiating a first in human clinical trial at Greenlane Hospital,
Auckland, New Zealand that established the value of the Petal™ technology
to potential suitors. (led by Dr. John Ormiston and Dr. Mark Webster)
The outcome of these changes were that AST was able to position itself as a key technology for acquisition in the multi-billion dollar stent market, resulting in the company being courted by a number of large, strategic players in that industry. This also occurred in no small part due to the connections and relationships possessed by the principals. AST is an excellent example of Finistere Partners’ philosophy – to add significant value beyond capital to the development and commercialization of emerging technologies.
