Johnson & Johnson plans to acquire heart pump maker Abiomed for $16.6 billion, capping a year of slowed medical device M&A in 2022. According to data from consulting and accounting firm EY, there were only 11 deals exceeding $1 billion in all of 2022, compared with 21 in 2021.

The economic downturn was one reason for the slowdown in deals, with many companies' stock prices falling. In October, before Johnson & Johnson reached its agreement with Abiomed, CFO Joe Wolk said market volatility was "not conducive to a good M&A environment." He noted that potential sellers were reluctant to sell at prices below recent historical highs.

Johnson & Johnson's offer for Abiomed was near its 52-week high of $381.99 per share. Boston Scientific's planned $615 million acquisition of Apollo Endosurgery was also priced near its 52-week high of $10 per share, with analysts noting the two deals were announced within weeks of each other.

"I don't think we're ready to return to the M&A boom of 2021," John Babitt, life sciences partner at EY, said in an interview. He noted that many mid-sized companies' stock prices remain 20% to 30% below recent highs. But he added that companies may be realizing that stock prices won't rebound as quickly as they did in the early days of the COVID-19 pandemic.

In terms of private equity- and venture capital-backed deals, 2022 saw the fewest transactions since 2016, said Jon Norris, managing director of Silicon Valley Bank's healthcare practice.

"I think those small and mid-sized companies that were very active and boosted the industry through acquisitions in 2021 are now more focused on cash reserves, earnings per share, and their own products, and are less willing to acquire new companies," Norris said.

Many of the deals that closed involved products with 510(k) clearance, which large companies could easily incorporate into their revenue streams.

"Overall, there's been less activity in the device space, with more focus on larger acquirers," Norris summarized.

Here are details on the top 10 medical device M&A deals of 2022.

1. Johnson & Johnson acquires Abiomed

Amount:$16.6 billion
Announcement date:November 1

After a quiet period in medical device M&A, Johnson & Johnson acquired Abiomed for $16.6 billion. The deal was priced at $380 per share, a 51% premium over the closing price the day before the announcement. Shareholders of Abiomed, headquartered in Danvers, Massachusetts, could also receive up to an additional $35 per share if the company achieves specific commercial and clinical milestones.

Earlier in the year, Johnson & Johnson CEO Joaquin Duato said the company would take a "more aggressive strategy" in medical device M&A while spinning off its consumer health business to focus on pharmaceuticals and medical devices.

Abiomed is expected to complement Johnson & Johnson's Biosense Webster electrophysiology business and operate as a standalone business within Johnson & Johnson's medical device segment.

2. Stryker acquires Vocera Communications

Amount:$3.09 billion
Completion date:February 23

Stryker's acquisition of Vocera is a typical example of a medical device company seeking software assets. Vocera, based in San Jose, California, provides communication and workflow optimization software for hospitals.

After the deal was announced in January, some analysts expressed confusion because Vocera deviates from Stryker's traditional surgical and medical equipment focus, and its valuation reached 11.5 times its expected 2022 revenue.

On Stryker's most recent quarterly earnings call, Vice President of Investor Relations Jason Beach said the company is "pleased" with the integration process, although some installations have been delayed due to sales team adjustments, and the company plans to migrate more customers to the cloud.

3. Thermo Fisher Scientific acquires The Binding Site

Amount:$2.6 billion
Announcement date:October 31

Thermo Fisher Scientific reached an agreement to acquire UK diagnostics company The Binding Site Group for £2.25 billion (approximately $2.6 billion). The company produces two blood tests used for multiple myeloma, used to diagnose the cancer and monitor patients after treatment.

The company will be integrated into Thermo Fisher's specialty diagnostics business, which currently includes COVID-19 testing and monitoring of immunosuppressant drug levels in transplant patients.

The transaction is expected to close in the first half of 2023.

4. BD acquires Parata Systems

Amount:$1.53 billion
Completion date:July 18

BD's acquisition of Parata Systems is another software-oriented deal. Parata, based in Durham, North Carolina, provides automated vial filling, packaging, and central dispensing software for pharmacies. JPMorgan analysts believed the business could be combined with BD's Pyxis automated medication dispenser product line.

BD said Parata would help it achieve its goal of a 25% operating margin by the end of 2025. The two companies reached an agreement in June and completed the acquisition a month later.

The acquisition has already boosted BD's revenue. In the fourth quarter of fiscal 2022, BD's medical segment (including medication management and pharmaceutical systems) saw revenue grow 5.8% year-over-year. However, overall company revenue declined due to currency effects and lower COVID-19 testing sales.

5. ArchiMed acquires Natus Medical

Amount:$1.2 billion
Completion date:July 21

A fund affiliated with French investment firm ArchiMed acquired Natus Medical, headquartered in Middleton, Wisconsin, which manufactures devices for screening, diagnosing, and treating neurological disorders. ArchiMed's MED Platform II fund acquired the company at $33.50 per share, a premium of approximately 29% over the closing price the day before the announcement.

Natus produces EEG systems, intracranial pressure monitors, EMG equipment, and hearing assessment products. The company was founded in 1987 and sells products in more than 100 countries.

6. Masimo acquires Sound United

Amount:$1.03 billion
Completion date:April 11

Masimo, a medical device company headquartered in Irvine, California, acquired Viper Holdings, the parent company of consumer electronics company Sound United. The acquisition was used to support Masimo's consumer product launches, including pulse oximeters, biosensor smartwatches, and sleep monitors. Sound United owns audio brands such as Denon, Bowers & Wilkins, and Boston Acoustics.

In early December, Masimo said users can now connect passive health monitoring technology to Denon's HEOS entertainment system and share personal health information with clinicians via Masimo servers.

Stifel analysts noted in a February 15 research report that Masimo could leverage Sound United's manufacturing capabilities and commercial channels (such as Best Buy) to sell more personal monitoring devices, while also bringing Sound United products into hospital settings.

After the acquisition closed in April, the combined company experienced some leadership changes. Sound United CEO Kevin Duffy was terminated without cause in July, after having been promoted to president of Masimo's consumer division. Two months later, Masimo promoted former Sound United Chief Commercial Officer Blair Tripodi to chief operating officer of the consumer business.

Masimo's stock has fallen approximately 49% over the past 12 months. On February 16, the day after the acquisition was announced, the stock fell 37% in a single day.

7. ResMed acquires MediFox

Amount:$976 million
Completion date:November 22

ResMed reached an agreement to acquire German software company MediFox Dan for €950 million (approximately $976 million). MediFox provides care documentation, administrative, and billing software for out-of-hospital care providers.

ResMed's core business is sleep and respiratory devices, and it also owns two SaaS brands, MatrixCare and Brightree. The acquisition aims to complement Brightree and help ResMed expand its software business beyond the United States.

In a November update, ResMed said it would retain MediFox's employees, locations, and business processes, and the company would report to ResMed's SaaS president, Bobby Ghoshal. MediFox has more than 700 employees.

8. Medtronic acquires Affera

Amount:$925 million
Completion date:August 30

Medtronic announced in 2022 the acquisition of Affera, headquartered in Newton, Massachusetts, which manufactures cardiac ablation and cardiac mapping devices. The $925 million offer includes $250 million to be paid upon meeting specific "contingent consideration" conditions.

When the acquisition was announced in January, Medtronic CEO Geoff Martha said it would give Medtronic a "more complete" electrophysiology ablation portfolio and help it compete better in high-growth markets.

Cardiac ablation treats arrhythmias by creating tiny scars in the heart to block irregular electrical signals. Affera's technology has not yet received FDA approval and would provide Medtronic with its first mapping and navigation system for treating atrial fibrillation.

9. CooperCompanies acquires Cook Medical's reproductive health business

Amount:$875 million
Announcement date:February 7

CooperCompanies, headquartered in Pleasanton, California, which focuses on women's health and fertility solutions, reached an agreement to acquire Cook Medical's reproductive health business, including obstetrics, gynecology, and in vitro fertilization (IVF) products.

Cook Medical, headquartered in Bloomington, Indiana, was founded in 1963 and developed the first needle used for IVF treatment. CooperCompanies agreed to pay $675 million at closing and an additional $200 million over the next four years.

In April, the two companies received a request for additional information from the U.S. Federal Trade Commission regarding the acquisition, and a Cook spokesperson said the deal had not yet closed.

10. Boston Scientific acquires Apollo Endosurgery

Amount:$615 million
Announcement date:November 29

Boston Scientific announced plans to acquire Apollo Endosurgery, headquartered in Austin, Texas, which manufactures intraluminal surgery devices—minimally invasive procedures performed through the gastrointestinal tract using an endoscope.

The acquisition is expected to complement Boston Scientific's endoscopy business and give it entry into the intraluminal weight loss market.

The deal valued Apollo at $10 per share. The company expected 2022 revenue of $76 million, approximately one-eighth of the acquisition price.