The relationship between Boston Scientific,

Neovasc, and Edwards Lifesciences

Neovasc Inc. (NVCN) is developing a mitral valve replacement (TMVR) called the
Tiara, to treat mitral regurgitation (MR), a condition that is often severe and can
lead to heart failure and death.
Edwards Lifesciences (EW) is also currently developing an acquired TMVR, the
CardiAQ valve.
Boston Scientific (BSX) currently has a CE marked aortic valve replacement
(TAVR), the LOTUS Edge, but no TMVR. The LOTUS is being voluntarily recalled due
to a locking mechanism issue having occurred in 7 of 200 commercially implanted
patients. An improved valve should be back on the European market in the 4 th
quarter of 2017 as it will not require a redesign. As of the March 2017
announcement of the planned purchase of Symetis for $435m, Boston Scientific
will now have two more aortic valve replacements that are CE marked but not FDA
approved, the ACURATE TA & ACURATE neo. These aortic valve replacements are
not to replace the recalled LOTUS, rather give further treatment options for patient
variables and doctors preferences. In February of 2017, before the deal with BSX,
Symetis acquired Middle Peak Medical and the TMVR they were developing. After
Boston Scientifics announcement regarding the acquisition of Symetis, BSX
interventional cardiology president Kevin Ballinger told analysts during a conference
call that Middle Peaks TMVR assets did not fit in with their other programs,
that they currently have other investments in the mitral field, and that
they were comfortable with their investments in these areas.

The investment he was referring to was their stake in Neovasc. In December 2016,
BSX purchased NVCNs tissue processing technology and a 15% equity investment
in its company, in which NVCN intends to use the proceeds of the transactions to
post a partial bond in connection with a stay of judgement pending appeal in the
ongoing litigation against CardiAQ Valve Technologies, Inc.
Buying Neovascs up-and-running and FDA approved tissue processing facilities will
greatly aid Boston Scientific in its FDA approval process, as they plan to apply for
FDA premarket approval (PMA) in 2017. The deal also doesnt affect Neovascs
current customers or clinical research, as a license was granted to allow them to
continue current business and development in the same facilities. Neovascs Tiara is
expecting a primary endpoint from its feasibility study (TIARA-I) in August of 2017
and has received regulatory approval in Italy for the initiation of its clinical study
evaluating safety and performance (TIARA-II).
Furthermore, BSX has a $200m option to purchase Mvalve Technologies, a mitral
valve docking technology used in conjunction with the LOTUS Edge, which is
currently in an early feasibility study nowhere near approval.
Since Edwards Lifesciences was spun off in 2000, they have been involved in patent
infringement lawsuits against St. Jude Medical, Medtronic, Boston Scientific,
EndoHeart, and Neovasc all regarding supposed patent infringements. A settlement
was reached with St. Jude Medical for $5.5M. A settlement was also reached with
Medtronic over their product CoreValve, as Medtronic agreed to pay EW $750m plus
a minimum of $40m per year until April 2022. Courts in Germany and England have
recently ruled in favor of BSX regarding patent disputes over EWs Sapien and BSXs
LOTUS, as EW plans to seek approval to appeal. EndoHeart AG has filed against
EWs Ascendra Delivery System, Balloon Aortic Valvuloplasty Catheter, Introducer
Sheath Set, Sapien Transcatheter Heart Valve, and Edwards Crimper. Lastly, a
federal jury in Massachusetts awarded EW $70m in its litigation against NVCN
regarding Tiara patents, which is currently being appealed.

Whats important to realize is that Boston Scientific has recently made two deals to
strengthen its structural heart pipeline, in which they do not currently have any FDA
approved TMVR products. In the deal with Symetis, they would be acquiring their
own TMVR. Instead, BSX is invested in and committed to Neovasc, whom is well
ahead of its competition (EW) in the race to approval. Boston Scientific and Neovasc
both apparently share the common enemy of Edwards Lifesciences.

There have been a number of mitral valve repair and replacement companies
purchased in the past few years, in all phases of trials. Medtronic acquired mitral
valve device developer Twelve for $458m. Edwards Lifesciences acquired CardiAQ
Valve Technologies for $400m and has the option to purchase Harpoon, a mitral
valve repair company, as soon as 2017 pending trial results. Abbott acquired
Tendyne Holdings for $250m plus an undisclosed amount of investment in Cephea
Valve Technologies. HeartWare acquired mitral valve repair company Valtech for
$800m. A simple average of these 4 deals equates to $477m. A purchase of
Neovasc for $477m with 67.47m shares outstanding would equate to $7.07 per
share. An $800m deal would equate to $11.85/share. A deal of $250m would be
$3.70/share.
http://www.prnewswire.com/news-releases/neovasc-and-boston-scientific-close-
us75-million-agreement-606242846.html
http://www.massdevice.com/jury-awards-edwards-lifesciences-70m-cardiaq-valve-
patent-spat-neovasc/
http://www.neovasc.com/products/neovasc-tiara/
http://www.sciencedirect.com/science/article/pii/S0735109712000022
https://www.tctmd.com/news/boston-scientific-adds-two-more-tavr-valves-symetis-
purchase
https://clinicaltrials.gov/ct2/show/NCT02909556

http://www.mddionline.com/article/boston-scientific-gears-lotus-valve-neovasc-deal-
12-02-16

http://www.newswire.ca/news-releases/neovasc-receives-regulatory-approval-to-
initiate-tiara-ii-ce-mark-study-603354766.html
https://www.meddeviceonline.com/doc/boston-scientific-pumps-million-into-mvalve-
technologies-0001
https://www.harpoonmedical.com/single-post/2015/12/11/Baltimores-Harpoon-
Medical-Could-be-Acquired-in-2017
http://news.bostonscientific.com/2017-03-09-Boston-Scientific-Receives-Favorable-
Rulings-In-Edwards-Lifesciences-Litigation
http://newsroom.medtronic.com/phoenix.zhtml?c=251324&p=irol-
newsArticle&ID=1932573
http://www.fdanews.com/articles/67838-edwards-st-jude-medical-settle-patent-
lawsuit?v=preview
http://www.massdevice.com/symetis-acquires-mitral-valve-maker-middle-peak-
medical/
http://www.gurufocus.com/term/Shares+Outstanding/NVCN/Shares-
Outstanding/Neovasc-Inc