Advanced Bionics Is An Independent Cochlear Implant Maker Again

In 2004, it seemed to be a marriage made in heaven: Boston Scientific, the world’s leading manufacturer of cardiac stents and other implant devices, acquired Advanced Bionics, one of the world’s three cochlear implant manufacturers for $740 million plus additional payments based on future growth. But the marriage quickly soured and after several difficult years dissolved entirely last week.

Advanced Bionics HiRes Implant
Advanced Bionics HiRes Implant
Boston Scientific agreed to return the Advanced Bionics cochlear implant and a line of drug-pump products back to Mann and other members of the original management team, and Boston Scientific will keep the Advanced Bionics pain management business, which includes a spinal-cord stimulator to manage chronic pain. The match was problematic nearly from its inception. When the Advanced Bionics HiRes implants ran into quality control problems the new parent company unsuccessfully attempted to replace Advanced Bionics’ visionary founder, Alred E. Mann. Boston Scientific’s subsequent acquisition of rival stent-maker Guidant also ran into costly quality problems, and Advanced Bionics complained its new parent, distracted and under increasing financial stress from the Guidant deal, was neglecting it by starving it of needed research and development funds. Despite the huge sums involved — Boston Scientific will pay Mann’s group $1 billion for the parts of the company it is keeping while unwinding the rest — the cochlear implant business is still in its infancy. Putting the company back in the hands of its founders while relieving them of the distractions of their squabbles with Boston Scientific could give Advanced Bionics a competitive edge in its battle with the other two cochlear implant makers, Cochlear of Australia and Med-El of Austria, for leadership of the global market.