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Boston Scientific's Symetis Buyout Boosts Structural Heart

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Medical device major Boston Scientific Corporation (BSX - Free Report) recently completed the acquisition of Switzerland-based Symetis SA. The buyout, valued at $435 million in upfront cash should fortify Boston Scientific’s structural heart business in Europe.

We note that, Symetis is a privately-held structural heart company focused on less-invasive transcatheter aortic valve implantation (TAVI) devices. Post the deal closure, Symetis became part of the Boston Scientific Interventional Cardiology division.

The Symetis portfolio consists of the ACURATE TA and ACURATE neo/TF valve systems for treating high-risk patients suffering from severe and symptomatic aortic valve stenosis. These devices are sold in Europe and outside of the U.S. The company is also developing the ACURATE neo/AS, which is currently under clinical trial.

With the integration, Boston Scientific will shortly begin selling these valve systems in Europe and in other geographies outside of the U.S.  The company believes that Symetis’ ACURATE group of valve products strongly complements its Lotus Valve platform. Integrating these technologies will not only diversify Boston Scientific’s structural heart portfolio but also provide cardiac surgeons with multiple TAVI offerings for varying patient pathologies and anatomy.

The acquisition of Symetis follows the company’s recent purchase of certain manufacturing assets and biologic tissue capabilities of Neovasc, Inc. The assets will be used in manufacturing Boston Scientific’s Lotus Valve system and future heart valve technologies under structural heart portfolio.

Per a recent ReportBuyer’s report, the global structural heart market is expected to grow at a CAGR of 14.3% from 2017 to 2022 and reach an estimated $9.7 billion by 2022. The major drivers for this market growth are increasing demand for minimally invasive surgery, rising healthcare expenditure and a growing geriatric population. We believe, Boston Scientific’s consistent focus on this niche is strategic in capturing the untapped potential of this market.

For the last three months, Boston Scientific has traded below the Zacks categorized Medical - Products industry on challenging economy, competitive landscape and currency headwinds. The stock has gained 2.17% compared with 5.6% gain of the broader industry. Though the company is also majorly entangled in its Lotus Valve product recall issue within Europe, we believe the latest acquisition of Symetis is well timed.

Zacks Rank & Key Picks

Boston Scientific currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical sector include Luminex Corporation (LMNX - Free Report) , Hologic, Inc. (HOLX - Free Report) and Edward Lifesciences, Inc. (EW - Free Report) . Notably, Luminex sports a Zacks Rank #1 (Strong Buy), while Hologic and Edward Lifesciences carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock added roughly 17.0%, over the last three months.

Hologic has a long-term expected earnings growth rate of 11.33%. The stock has a solid one-year return of roughly 30.5%.

Edward Lifesciences recorded a stellar EPS growth rate of almost 16% (last three to five years of actual earnings).

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