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AngioDynamics' (ANGO) BioSentry Buyout to Boost Oncology

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AngioDynamics (ANGO - Free Report) recently announced the acquisition of BioSentry Tract Sealant System (BioSentry) technology from Surgical Specialties, LLC. Notably, the system will be integrated into the company’s core Oncology business. A 12-person commercial organization of Surgical Specialties will join AngioDynamics to expand the reach of its Oncology business.

Management expects the acquisition to be neutral to earnings in fiscal 2019.

Following the announcement, AngioDynamics’ share price inched up 0.3% to $21.53 at yesterday’s close. Meanwhile, shares of the company have rallied 26.3% against the industry’s decline of 5.8% in a year’s time.

The stock carries a Zacks Rank #4 (Sell).

Coming back to the news, BioSentry Tract Sealant System is the first of its kind and a major development in the prevention of lung biopsy-related pneumothorax (PTX). Notably, the system has received FDA clearance and also a CE Mark in Europe.

Going by a paper in the Journal of Thoracic Disease, a total of 234,030 estimated new lung and bronchus cancer cases are likely to be diagnosed in 2018.

Hence the buyout is likely to be a profitable one for AngioDynamics.

Market Prospects

A study by MarketsandMarkets shows that the global biopsy devices market is projected to reach $2.42 billion by 2022 from $1.74 billion in 2017, at a CAGR of 6.8%. The report further states that North America accounted for the largest share of the biopsy devices market in 2016, followed by Europe.

We expect the trend to continue, given the rising prevalence of cancer and government initiatives to spread awareness about the disease.

Hence the latest move has been a well-timed one for AngioDynamics.

Oncology Unit at a Glance

AngioDynamics’ Oncology division includes highly coveted product lines like Microwave Ablation, Radiofrequency Ablation and NanoKnife.

In the recently reported fourth quarter of fiscal 2018, revenues at the segment grossed $12.1 million, up a significant 38% year over year. The upside can be attributed to strong growth seen by the Solero Microwave Ablation System.

Want More From the Industry?

A few better-ranked stocks from the Medical Instruments space are Intuitive Surgical (ISRG - Free Report) , Masimo Corporation (MASI - Free Report) and Inogen, Inc. (INGN - Free Report) .

Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Inogen’s long-term earnings growth rate is projected at 24.5%. The stock carries a Zacks Rank #2.

Masimo’s expected long-term earnings growth rate is 14.8%. The stock currently has a Zacks Rank #2.

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