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Boston Scientific (BSX) Inks $75 Million Deal with Neovasc
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In its effort to enhance innovations, particularly in its key growth markets, Boston Scientific Corporation (BSX - Free Report) recently inked a deal with specialty medical device company Neovasc Inc. (NVCN), which caters to the cardiovascular market. Per the deal, Boston Scientific will buy Neovasc’s tissue processing technology and facility for $67.9 million.
The buyout should fortify Boston Scientific’s Lotus Transcatheter Aortic Valve business within its growing Structural Heart segment. In addition, the company intends to acquire 15% equity interest in Neovasc for $7.1 million. However, this is subject to certain regulatory approvals, including that of the Toronto Stock Exchange.
We note that, Boston Scientific traded higher than the S&P 500 index over the past six months until it delivered unimpressive third-quarter results. Despite a raised 2016 guidance, the company’s share price has fallen further on account of certain product halt in late October. Per the last trading day, overall the company lost 10.55% as against the S&P 500 index’ 3.7% gain over the last six months.
Nonetheless, we are currently looking forward to the closing of the Neovasc deal (by the end of 2016), which while strengthening the company’s position in the huge and growing structural heart market should also provide solid competitive edge in the transcatheter heart valve market, especially among the likes of Medtronic and Edwards Lifesciences.
Coming back to the details of the agreement, Neovasc’s biological tissue capabilities will be integrated within Boston Scientific’s structural heart segment. According to Boston Scientific, the integration will strengthen its structural heart pipeline and immediately benefit its Lotus valve platform. The company is currently working to increase its Lotus valve market share in Europe. It is investing considerably in clinical studies, R&D and global supply chain to develop its capabilities in this product. The company is also working on the launch the same in the U.S. in late 2017.
In this regard, we note that, over the past few quarters the company witnessed strong uptake in the Structural Heart business franchise, on the back of strong Lotus Transcatheter Aortic Valve performance. Management believes that the company is well poised to drive long-term growth in this fast-growing market via its differentiated platforms and expanded capabilities.
However, Boston Scientific expects the effect of the impending acquisition to be immaterial to its earnings per share in 2016 and 2017 on an adjusted and reported basis.
Zacks Rank & Key Picks
Boston Scientific currently carries a Zacks Rank #3 (Hold). Better-ranked medical stocks include NxStage Medical Inc. , Baxter International Inc. (BAX - Free Report) and Bovie Medical Corporation . NxStage Medical and Baxter International sport a Zacks Rank #1 (Strong Buy) while Bovie Medical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
NxStage Medical surged 22.5% over the last year compared with the S&P 500’s 4.7% over the same period. The company has a four-quarter average positive earnings surprise of 50.00%.
Baxter International rallied 17.2% over year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
Bovie Medical recorded a 121.2% gain in the past year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.
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Boston Scientific (BSX) Inks $75 Million Deal with Neovasc
In its effort to enhance innovations, particularly in its key growth markets, Boston Scientific Corporation (BSX - Free Report) recently inked a deal with specialty medical device company Neovasc Inc. (NVCN), which caters to the cardiovascular market. Per the deal, Boston Scientific will buy Neovasc’s tissue processing technology and facility for $67.9 million.
The buyout should fortify Boston Scientific’s Lotus Transcatheter Aortic Valve business within its growing Structural Heart segment. In addition, the company intends to acquire 15% equity interest in Neovasc for $7.1 million. However, this is subject to certain regulatory approvals, including that of the Toronto Stock Exchange.
We note that, Boston Scientific traded higher than the S&P 500 index over the past six months until it delivered unimpressive third-quarter results. Despite a raised 2016 guidance, the company’s share price has fallen further on account of certain product halt in late October. Per the last trading day, overall the company lost 10.55% as against the S&P 500 index’ 3.7% gain over the last six months.
Nonetheless, we are currently looking forward to the closing of the Neovasc deal (by the end of 2016), which while strengthening the company’s position in the huge and growing structural heart market should also provide solid competitive edge in the transcatheter heart valve market, especially among the likes of Medtronic and Edwards Lifesciences.
Coming back to the details of the agreement, Neovasc’s biological tissue capabilities will be integrated within Boston Scientific’s structural heart segment. According to Boston Scientific, the integration will strengthen its structural heart pipeline and immediately benefit its Lotus valve platform. The company is currently working to increase its Lotus valve market share in Europe. It is investing considerably in clinical studies, R&D and global supply chain to develop its capabilities in this product. The company is also working on the launch the same in the U.S. in late 2017.
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In this regard, we note that, over the past few quarters the company witnessed strong uptake in the Structural Heart business franchise, on the back of strong Lotus Transcatheter Aortic Valve performance. Management believes that the company is well poised to drive long-term growth in this fast-growing market via its differentiated platforms and expanded capabilities.
However, Boston Scientific expects the effect of the impending acquisition to be immaterial to its earnings per share in 2016 and 2017 on an adjusted and reported basis.
Zacks Rank & Key Picks
Boston Scientific currently carries a Zacks Rank #3 (Hold). Better-ranked medical stocks include NxStage Medical Inc. , Baxter International Inc. (BAX - Free Report) and Bovie Medical Corporation . NxStage Medical and Baxter International sport a Zacks Rank #1 (Strong Buy) while Bovie Medical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
NxStage Medical surged 22.5% over the last year compared with the S&P 500’s 4.7% over the same period. The company has a four-quarter average positive earnings surprise of 50.00%.
Baxter International rallied 17.2% over year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
Bovie Medical recorded a 121.2% gain in the past year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>