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Healthcare: Kevin Hykes

Hykes: plans to “scan the horizon” after couple of months off

Kevin Hykes engineered one of the biggest medical device deals in recent Orange County history during 2012.

Hykes oversaw the March sale of San Clemente-based startup Cameron Health Inc. to diversified device maker Boston Scientific Corp. of Natick, Mass., in a deal that could ultimately be worth more than $1.3 billion.

Boston Scientific paid $150 million upfront for Cameron, and another $150 million kicked in with Food and Drug Administration approval for its S-ICD implantable heart defibrillator shortly after the deal.

Additional milestone payments could push the total to as much as the $1.35 billion mark over a six-year period.

Cameron’s S-ICD is a device some consider to be a game-changer in the field of heart-rhythm management. S-ICD is implanted under the skin to provide an electric shock to interrupt potentially fatal rhythms during a heart attack and does not have lead wires that have caused problems with other implantable defibrillators.

S-ICD received Food and Drug Administration approval in late September, three months after Boston Scientific acquired Cameron. The new owner introduced the device to the U.S. market—it had already been available in Europe—almost immediately after the deal closed.

“At the highest level, what I’m most proud of is that we have now offered patients who are at risk of sudden cardiac deaths, an absolutely novel option,” said Hykes, who became Cameron’s chief executive in 2010.

There are more than 200 patents on the S-ICD.

“What I helped do was help them build the commercial effort, finish the clinical effort, refinance the company [and] turn it into a business that could be acquired by Boston Scientific for over a billion dollars,” he said.

Boston Scientific—which has some 24,000 workers, $7.8 billion in annual sales, and a recent market value of about $8 billion—originally invested in Cameron back in 2003, when it got an option to buy the whole company.

Earlier this year, though, “it was our perception that they were not going to exercise the option,” Hykes said.

Boston Scientific made its move to buy Cameron during a 45-day decision window “that was triggered by our FDA submission,” Hykes said, adding that there hadn’t been “a whole lot of conversation” between the companies for the prior four or five years.

Cameron officials then prepared for what Hykes called “multiple next steps.” Those included an open-market auction and a potential initial public offering as a “third course.”

Hykes said that Boston Scientific executives “began to sit up and pay much closer attention in Natick, Massachusetts,” to Cameron after the latter started publishing clinical data for the S-ICD.

Due Diligence

Boston Scientific contacted Cameron at the end of the 45-day window to start due diligence on the company.

Hykes said the diligence was shorter because it was set out in the investment deal.

Boston Scientific announced its intention to buy Cameron in March, and closed the deal in early June.

The process was “dramatically accelerated” because the FDA was ahead of schedule in terms of approving S-ICD. Hykes said Cameron had expected approval in June 2013.

Hykes, whose experience also includes stints at Minneapolis-based Medtronic Inc. and Irvine-based eye device startup Visiogen Inc., left Cameron on Dec. 13, along with several other executives.

“[These were] very expected departures, not a surprise at all,” Hykes said.

Other Cameron senior executives will be going to Boston Scientific’s cardiac rhythm management headquarters in Arden Hills, Minn., although Cameron itself will keep its offices and manufacturing operations for S-ICD in San Clemente.

Hykes is a married father of three who now plans to take a few months off “at my wife’s direction [and] scan the horizon.” He said he’ll probably get in some skiing before re-emerging in the spring to “hopefully identify another interesting medical device opportunity.”

Hykes said there were other things he was proud of during his time at Cameron, including a $107 million venture investment in 2011 that he said brought back “a company that was on fumes and threatened with insolvency.”

That round of funding was led by Palo Alto-based Alloy Ventures and Delphi Ventures in Menlo Park.

Versant Venture Management LLC, a Bay Area firm with a Newport Beach office, was an early Cameron investor. William Link, an Orange County-based Versant managing director, served on Cameron’s board.

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