Share prices for revolutionary medical technology company CryoCor (Nasdaq: CRYO) skyrocketed this morning before slowly settling down this afternoon, launching from yesterday’s closing price of $4.84 a share to this morning’s opening price of $6.77, then dropping down to a price of $5.86 a share by 1:21 p.m. CDT.The source of the activity seems to be a press release the company published after market close yesterday. According to the release, CryoCor and the Boston Scientific Corporation (NYSE: BSX) recently announced a “strategic collaboration in the field of cryoablation” – the process of restoring electrical conduction in the muscles of the heart by freezing tissue or heart pathways that are interfering with this conduction – “for the treatment of cardiac arrhythmias.” In addition, the release stated that this collaboration involves the “co-development of therapeutic solutions for atrial fibrillation,” one of the most common types of cardiac arrhythmia, a heart condition in which the electrical activity is irregular, or runs too fast or too slow.
Although the process behind this form of cryotherapy is complex, the collaboration isn’t. According to the release, CryoCor and Boston Scientific Corporation will work together to develop a console that will deliver what the release calls “cryo energy” – that is, extreme cold – to Boston Scientific’s cryo balloon catheter technology. CryoCor will be responsible for developing, and possibly manufacturing the cryoablation console for use with the balloon. As part of the development program, Boston Scientific purchased $2.5 million worth of CryoCor’s common stock, and agreed to purchase an additional $2.5 million of the company’s stock upon “achievement of certain development milestones,” although the release doesn’t state what these milestones would be.
This kind of technology seems right up CryoCor’s alley. Since 2002, the company has been using its Cryoablation System to treat cardiac arrhythmia in Europe, and is carrying out a “pivotal trial” to see whether their technology is safe enough to be marketed in America.
Ed Brennan, CryoCor’s CEO, was excited about the collaboration.
“We are pleased that Boston Scientific chose to collaborate with CryoCor for the development of this important product,” Brennan said in the release. “We view this relationship as further validation of cryoablation, and CryoCor specifically, and we believe that Boston Scientific can provide valuable assistance to us as we prepare for the launch of our cryoablation system in the United States.”
