Boston Scientific (BSX) Signs Obsidio-Acquisition Agreement
Boston Scientific Corporation BSX recently announced the acquisition of Obsidio, Inc. This privately-held company is the renowned developer of the FDA-authorized Gel Embolic Material (GEM) technology.
The GEM technology is utilized for the embolization of blood vessels in the peripheral vasculature. It is a semi-solid, proprietary material packaged in a ready-to-use form. It reduces the preparation time required in several embolization procedures.
The Obsidio-buyout expands Boston Scientific’s interventional oncology and embolization portfolio with a differentiated solution for physicians and patients suffering from hemorrhages, cancer and other debilitating conditions.
The deal is anticipated to be immaterial to Boston Scientific's GAAP and adjusted earnings per share in 2022. However, specific terms of the transaction have been kept under wraps.
More on the GEM Technology
The GEM agent can be administered through a catheter by physicians. Its gel-like composition allows for controlled placement within a patient’s anatomy. Once placed, the GEM technology conforms to the targeted vasculature, instantly creating a barrier. It differs from other solid and liquid embolics that take time to form an obstruction to blood flow.
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The GEM technology integrates the benefits of currently available embolics, including the precise control of a solid and the malleability of a liquid, to develop a distinctive technology that facilitates procedural efficiency and a more personalized treatment for patients.
Per a report by Research and Markets, the vascular embolization market is expected to see a CAGR of 8.6% during 2022-2027. Factors such as the rising incidence of vascular diseases, technological advancements, growing research and development activities, and increasing demand for minimally invasive procedures are driving the market.
Given the market prospects, Boston Scientific’s latest buyout seems strategic.
Other Notable Developments
In June 2022, Boston Scientific entered into a definitive agreement with Synergy Innovation Co., Ltd, to acquire the latter’s majority stake (roughly 64%) of M.I.Tech Co., Ltd, ("M.I.Tech"). M.I.Tech is a publicly traded Korean company that developed the HANAROSTENT technology-- a family of conformable, non-vascular, self-expanding metal stents. The purchase price stated in the agreement is KRW 14,500 per share, subject to fulfillment of closing adjustments.
In April 2022, Boston Scientific gained FDA 510(k) clearance for the EMBOLD Fibered Detachable Coil. This device is indicated to obstruct or reduce blood flow rate in the peripheral vasculature. It is the latest addition to the Boston Scientific interventional oncology portfolio and is designed for use in a wide range of embolization procedures.
In the same month, the company also received FDA approval for Vercise Neural Navigator with STIMVIEW XT— its latest image-guided programming software. The STIMVIEW XT has been developed in collaboration with Brainlab AG, a leading software-driven medical technology company. It provides clinicians with the ability to visualize both lead placement and stimulation modeling of the brain anatomy in patients with Parkinson’s disease or essential tremor in real-time.
Share Price Performance
The stock has outperformed its industry over the past year. It has lost 1.7% against the industry’s 22.2% decline.
Zacks Rank & Key Picks
Boston Scientific currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space that investors can consider are AMN Healthcare Services, Inc. AMN, Molina Healthcare, Inc. MOH and Patterson Companies, Inc. PDCO.
AMN Healthcare has a long-term earnings growth rate of 3.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 15.7%, on average. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has outperformed its industry in the past year. AMN has lost 0.4% against the industry’s 27.6% fall.
Molina Healthcare has a long-term earnings growth rate of 16.4%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 3.2%, on average. It currently carries a Zacks Rank #2 (Buy).
Molina Healthcare has outperformed its industry in the past year. MOH has gained 30.7% against the industry’s 30.6% growth.
Patterson Companies has an estimated long-term growth rate of 7.9%. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%. It currently flaunts a Zacks Rank #2.
Patterson Companies has outperformed its industry in the past year. PDCO has gained 1.6% compared with the industry’s 4.1% fall in the past year.
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