In a strategic play to strengthen its cardiovascular portfolio, Johnson & Johnson (NYSE: JNJ) finalized its $13.1 billion all-cash acquisition of Shockwave Medical (NASDAQ: SWAV) in the latter half of 2024, a groundbreaking move that highlights the growing importance of innovative intravascular technologies in the medical technology sector.
Why Shockwave?
Shockwave Medical has carved out a niche with its intravascular lithotripsy (IVL) technology, a novel approach to treating calcified cardiovascular disease by using sonic pressure waves to break up arterial plaque. With a reputation for innovation and a rapidly growing presence in the MedTech space, Shockwave has become an attractive target for larger healthcare giants seeking not only cutting-edge technology but also a foothold in the evolving cardiovascular treatment landscape.
J&J’s interest lies not just in Shockwave’s current flagship products — such as the C2 Coronary IVL catheter and S4 Peripheral IVL catheter — but also in its potential. The global rollout of Shockwave’s devices and ongoing R&D efforts present a lucrative expansion opportunity for J&J’s MedTech division. Shockwave reported $810 million in revenue for 2023 and surpassed the $1 billion revenue mark by the end of 2024 — a clear indicator of its rapid growth trajectory.
Precedent Deals in MedTech
J&J’s acquisition of Shockwave is the latest in a series of high-profile MedTech deals aimed at capturing growth in innovative healthcare technologies. In 2022, J&J acquired Abiomed for $16.6 billion, paying an enterprise value to revenue multiple of approximately 14.5x. Similarly, Medtronic’s $1.6 billion purchase of Mazor Robotics in 2018 was valued at 15.4x revenue. Boston Scientific’s $1.75 billion acquisition of Baylis Medical in 2021 also reflected a 11.5x revenue multiple.
Compared to these, the Shockwave deal’s 16.2x EV/Revenue multiple places it at the higher end of recent MedTech transactions — a clear signal that J&J sees significant growth potential and differentiation in Shockwave’s IVL technology.
The Road Ahead Post-Deal
Since the deal's closure in 2024, industry watchers have closely monitored how J&J is integrating Shockwave into its operations. Early signs suggest that J&J is focusing on scaling Shockwave’s technology globally, leveraging its well-established distribution network to push IVL devices into new markets.
The combined entity has already begun accelerating Shockwave’s pipeline, with an emphasis on expanding applications for IVL technology beyond cardiovascular treatments, exploring uses in peripheral artery disease and other complex vascular conditions. J&J has set an ambitious target of growing Shockwave’s annual revenue by at least 20% year-over-year, aiming for $1.5 billion by the end of 2025.
Investor Sentiment and Challenges
While Shockwave’s stock surged post-announcement, J&J’s shares experienced only a slight dip, reflecting a cautious optimism from investors. Since the deal closed, J&J’s stock has remained relatively steady, with analysts adopting a “wait and see” approach. Much of the post-deal performance has hinged on J&J’s ability to effectively integrate Shockwave’s operations without disrupting its innovative edge.
Shareholders are particularly focused on whether J&J can realize the revenue growth promised. The key challenge lies in balancing Shockwave’s entrepreneurial spirit — a hallmark of its success — with J&J’s corporate structure. Concerns also center around J&J’s ability to deliver on the $200 million in revenue synergies and $150 million in cost savings targeted by the end of 2025.
What Success Looks Like
For J&J, success is now being measured not just by expanding Shockwave’s market share but also by seeing tangible advances in cardiovascular care. If J&J can continue to scale IVL adoption worldwide and push Shockwave’s R&D pipeline forward, this deal could cement its leadership in the high-growth MedTech sector.
Moreover, hitting financial milestones remains key — analysts suggest that for the deal to be deemed a success, J&J must achieve at least 15% EPS growth by the end of 2025, driven by Shockwave’s expansion and seamless integration.
Ultimately, 2025 will be a pivotal year in testing J&J’s ability to deliver on its bold bet — not just in medical breakthroughs, but also in driving shareholder value and sustaining innovation.
The stakes are high, but so is the potential reward.