Boston Scientific Corporation has signed a pact with and Advanced Bionics Corporation to acquire its 100 per cent fully diluted equity for an initial payment of approximately $740 million in cash, plus earn out payments tied to future performance milestones.

The acquisition will expand Boston Scientific's technology portfolio into the rapidly growing implantable microelectronic device market. Advanced Bionics has developed implantable microelectronics for treating numerous neurological disorders. Its neuromodulation technology includes a range of neurostimulators (or implantable pulse generators), programmable drug pumps and cochlear implants.

Neuromodulation devices are used to treat chronic conditions such as lower back pain, hearing loss, urinary incontinence, Parkinson's disease, tremor and epilepsy. Other applications are currently under development. The total worldwide market for neurostimulation devices is estimated to be $1.6 billion in 2004 and is expected to grow substantially over the next several years, reaching approximately $3.8 billion by 2010.

Advanced Bionics is the only American manufacturer of cochlear implants for profoundly deaf children and adults. It has invested more than $100 million during the last five years to develop less-invasive neuromodulation technology platforms.

Advanced Bionics' neurostimulation devices treat neurological conditions through the delivery of focused electrical current to targeted nerve fibers. The implantable devices are wirelessly controlled by the physician or the patient to deliver the precise timing and amount of electrical current needed to overcome the patient's disabling condition. Advanced Bionics presently is organized around three different businesses:

Boston Scientific's entry into neuromodulation devices will expand its ability to reach new clinical markets and may add new therapeutic technologies for its existing businesses in urology, gastroenterology, cardiovascular and neurovascular medicine.

"The addition of the Advanced Bionics team to Boston Scientific brings an expertise in implantable neurostimulation devices that will complement and enhance our existing less-invasive technologies," said Jim Tobin, president and CEO of Boston Scientific Corporation. "Advanced Bionics has a proven product portfolio, an impressive research and development infrastructure, and an exciting long-term product pipeline," he added.