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BD's (BDX) Tissuemed Buyout to Boost its Surgical Solutions Arm

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Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, recently acquired Tissuemed, Ltd. The buyout enables BD to integrate Tissuemed's lead product, Tissuepatch, into its surgical solutions portfolio. However, the terms of the transaction have not been disclosed.

It should be noted that the impacts of this buyout are expected to be immaterial to BD's fiscal 2022 financial results.

For investors’ note, Leeds, England-based privately held firm — Tissuemed — is a well-known provider of self-adhesive surgical sealant films.

Few Words on Tissuepatch

Tissuemed’s Tissuepatch is a proprietary sealant technology that bonds to tissues, thereby aiding in controlling internal bleeding as well as preventing leaks from surgical incisions. Further, the technology's composition, which is ready to use out of the package, makes it perfectly suitable for various surgical sealant applications.

Significance of the Buyout

The latest acquisition expands BD's global offerings for surgeons outside the United States. Tissuepatch is already well known among surgeons as it enables strong adhesion and minimal swelling. This is expected to enable BD to leverage its reach and clinical expertise to continue breaking new ground within the sealant technology category. Notably, the technology is expected to make substantial progress over the next few years.

Per management, the advanced sealant is strategic, as it is expected to complement BD’s products currently used in the operating room. This is likely to enable the company to equip surgeons with a more robust and highly-integrated portfolio of surgical solutions and help it to support minimally invasive surgeries.

Industry Prospects

Per a report by Research and Markets, the global market for medical adhesives and sealants was estimated to be $10.3 billion in 2020 and is anticipated to reach $15.2 billion by 2027 at a CAGR of 5.6%. Factors like the rising number of surgical procedures and the growing number of medical implantation and transplantation procedures are likely to drive the market.

Given the market potential, the latest acquisition is expected to significantly strengthen BD’s business worldwide.

Recent Developments

Of late, BD has witnessed a few notable developments across its businesses.

The company, this month, acquired Venclose, Inc., which is expected to enable BD to offer a more robust portfolio of solutions to physicians treating the full range of venous conditions.

In November, the company reported its fourth quarter of fiscal 2021 results, where it recorded robust overall and segmental revenues.

In October, BD announced the formation of a public-private partnership with the Biomedical Advanced Research and Development Authority (part of the U.S. Health and Human Services Office of the Assistant Secretary for Preparedness and Response) to support the development of a range of COVID-19 combination diagnostic tests for core laboratories, hospitals and at the point of care.

Price Performance

Shares of the company have gained 1% in the past year compared with the industry’s 15.2% rise and the S&P 500 composite’s 29% growth.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank & Key Picks

Currently, BD carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical space are Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp, Thermo Fisher Scientific Inc. (TMO - Free Report) and AMN Healthcare Services (AMN - Free Report) .

LabCorp, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted earnings per share (EPS) of $6.82, which beat the Zacks Consensus Estimate by 42.9%. Revenues of $4.06 billion outpaced the consensus mark by 13.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

LabCorp has an estimated long-term growth rate of 10.6%. The company surpassed estimates in the trailing four quarters, the average surprise being 25.73%.

Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently carries a Zacks Rank #2.

Thermo Fisher has an estimated long-term growth rate of 14%. The company surpassed estimates in the trailing four quarters, the average surprise being 9.02%.

AMN Healthcare reported third-quarter 2021 adjusted EPS of $1.73, which surpassed the Zacks Consensus Estimate by 29.1%. Third-quarter revenues of $877.8 million outpaced the Zacks Consensus Estimate by 12.3%. It currently sports a Zacks Rank #1.

AMN Healthcare has an estimated long-term growth rate of 16.2%. The company surpassed estimates in the trailing four quarters, the average surprise being 19.51%.

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