We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Boston Scientific Acquires Neovasc to Boost Heart Business
Read MoreHide Full Article
Per its plan, medical device major Boston Scientific Corporation (BSX - Free Report) recently completed the acquisition of specialty medical device company Neovasc Inc.’s tissue processing technology and facility for $67.9 million. The company also acquired 15% equity interest in Neovasc for $7.1 million.
The buyout, which is part of the company’s effort to enhance innovations, particularly in its key growth markets, should fortify Boston Scientific’s Lotus Transcatheter Aortic Valve business within its growing Structural Heart segment.
We note that, Boston Scientific traded neck on neck with the S&P 500 index over the greater part of the past six months until it delivered unimpressive third-quarter results. Despite a raised 2016 guidance, the company’s share price has fallen on account of certain product halt in late October. Per the last trading day, overall the company lost 7.5% as against the S&P 500 index’ 8.7% gain over the last six months.
Neovasc’s biological tissue capabilities will be integrated within Boston Scientific’s structural heart segment. According to Boston Scientific, the integration will 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. It 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 this asset purchase 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). A couple of better-ranked medical stocks include NxStage Medical Inc. and Baxter International Inc. (BAX - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NxStage Medical surged 30.2% over the last one year compared with the S&P 500’s 11.2% growth over the same period. The company has a four-quarter average positive earnings surprise of 46.3%.
Baxter International rallied 20.8% over the last one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Boston Scientific Acquires Neovasc to Boost Heart Business
Per its plan, medical device major Boston Scientific Corporation (BSX - Free Report) recently completed the acquisition of specialty medical device company Neovasc Inc.’s tissue processing technology and facility for $67.9 million. The company also acquired 15% equity interest in Neovasc for $7.1 million.
The buyout, which is part of the company’s effort to enhance innovations, particularly in its key growth markets, should fortify Boston Scientific’s Lotus Transcatheter Aortic Valve business within its growing Structural Heart segment.
We note that, Boston Scientific traded neck on neck with the S&P 500 index over the greater part of the past six months until it delivered unimpressive third-quarter results. Despite a raised 2016 guidance, the company’s share price has fallen on account of certain product halt in late October. Per the last trading day, overall the company lost 7.5% as against the S&P 500 index’ 8.7% gain over the last six months.
Neovasc’s biological tissue capabilities will be integrated within Boston Scientific’s structural heart segment. According to Boston Scientific, the integration will 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. It 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 this asset purchase 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). A couple of better-ranked medical stocks include NxStage Medical Inc. and Baxter International Inc. (BAX - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NxStage Medical surged 30.2% over the last one year compared with the S&P 500’s 11.2% growth over the same period. The company has a four-quarter average positive earnings surprise of 46.3%.
Baxter International rallied 20.8% over the last one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
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 >>