MassDevice: Will The Stryker-MAKO Deal Lead To More Action In Ortho?

Stryker (NYSE:SYK) certainly found a way to liven up the ortho space, with Wednesday's announcement that it is buying Mako Surgical (NSDQ:MAKO) for a whopping 13 times 2013 estimated revenue. Stryker had been pretty clear about its intentions to put cash towards M&A, and Stryker's relative challenges in knees were already known, but few industry-watchers saw this deal coming, and certainly not at this price.

Over time, I think Stryker could do a lot with Mako. Obviously Stryker's management thinks so too, or they wouldn't have paid so much for it. What I'm interested to see now, though, is whether this move leads to any sort of consolidation push in the ortho industry and/or whether Stryker+Mako will fundamentally alter the balance of power in major joint recon and push the likes of Johnson & Johnson (NYSE:JNJ) and Zimmer (NYSE:ZMH) to up their games.

Read the full article here at MassDevice:
http://www.massdevice.com/blogs/brad-perriello/will-stryker-mako-deal-lead-more-action-ortho

MassDevice: Despite A Long Road Ahead, Sunshine Heart Is Worth A Serious Look

If you've been following the medical device (and/or pharmaceutical) space for a while, you know that congestive heart failure is one of the nastiest, hardest to treat, chronic conditions out there. There's really no way to reverse the disease short of a heart transplant, and the drugs and device therapies available sort themselves out between "largely ineffective" and "effective, but with serious issues".

That's terrible news for those patients who have congestive heart failure, but it leaves a tremendous opportunity for Sunshine Heart (NSDQ:SSH). This small-cap med-tech from Minnesota appears to have an ingenious solution to the problem, one that is based around well-understood principles and relatively simple technology. Although it will be at least four to five years before commercialization in the U.S., and that's only if the pivotal study shows adequate efficacy and an acceptable risk/benefit profile, this is definitely a name to watch in the med-tech space as the company looks to bring a new option to the table for seriously ill CHF patients.

Read the full article here:
http://www.massdevice.com/blogs/massdevice/despite-long-road-ahead-sunshine-heart-worth-serious-look

MassDevice: Once More Unto The Breach With Intuitive Surgical

The stock market is a funny place, and it's not all that uncommon for an analyst or investor to find himself defending a company/stock he once was not all that interested in owning. That's where I'm at these days with Intuitive Surgical (NSDQ:ISRG), as although I'm accustomed by habit to lamenting Wall Street's excessive enthusiasm for the company and the "everything is awesome" blue-sky feedback from docs during due diligence calls, sentiment has shifted quite a bit over the past few months.

Please read more here:
http://www.massdevice.com/blogs/massdevice/once-more-unto-breach-with-intuitive-surgical

MassDevice: MicroPort And Wright Medical Group Flip The Script

Apparently MicroPort and Wright Medical (NSDQ:WMGI) didn't get the memo – American med-tech companies are supposed to buy Chinese med-tech companies and not the other way around. But in a surprising announcement Wednesday night, the two companies revealed that MicroPort has reached an agreement to acquire Wright Medical's OrthoRecon business for $290 million in cash.

This is a bold move for both parties. It not only brings MicroPort into the global hip and knee market, but also establishes a meaningful presence for the company in the U.S. For Wright Medical, it removes a significant amount of execution risk, and makes the company a pure-play on the much faster-growing markets for orthopedic extremities and biologics.

Please continue here:
http://www.massdevice.com/blogs/massdevice/microport-and-wright-medical-group-flip-script

MassDevice: CareFusion May Be Weighing Two Very Different Deals

At the risk of sounding a bit mean, CareFusion (NYSE:CFN) doesn't get all that much attention in the market. The company has a solid business between its operations in pharmaceutical dispensing, infusion, respiratory care, and procedural disposables, but it never really seems to get much attention unless/until there's another round of news about infusion pumps – a business where rivals like Baxter (NYSE:BAX) and Hospira (NYSE:HSP) have seen recalls that benefited CareFusion.

That has changed very recently, though, as CareFusion seems to be a key potential acquirer for at least two medical device businesses known to be on the block – ICU Medical (NSDQ:ICUI) and Smiths Group's (LON:SMIN) Smith Medical. CareFusion has long been an active acquirer and recently not only reaffirmed its commitment to future deals, but a willingness to do larger deals than before. While both ICU Medical and Smiths Medical make solid sense for CareFusion, both deals have certain drawbacks as well.

Please continue on here:
http://www.massdevice.com/blogs/massdevice/carefusion-may-be-weighing-2-very-different-deals

MassDevice: Smarter Strategic Moves Bode Well For Wright Medical

There's a saying in the markets that there's always a bull market somewhere. Along similar lines, it's almost always possible to find areas of growth in otherwise stagnant med-tech markets. While the overall performance of the orthopedic market has been pretty uninspiring of late, the extremities sub-sectors (upper and lower extremities) have been notable exceptions.

Growing share in lower extremities is not the only positive factor at work in pushing Wright Medical (NSDQ:WMGI) to new highs. After years of pursuing what I believe to have been an unrealistic business model and a scandal tied to the industry-wide practice of improper payments to surgeons to use their implants, CEO Bob Palmisano has the company on the right track again. Two years into his tenure as CEO, there's still ground to cover in terms of margins, but the company's sales strategy for recon, its growth in extremities, and the assets acquired from BioMimetic Therapeutics make this a name to watch in the sleepy ortho sector.

Please follow this link to read the full article:
http://www.massdevice.com/blogs/massdevice/smarter-strategic-moves-bode-well-wright-medical

MassDevice: The Bulls May Have Run A Little Too Far With St. Jude Medical

Combine a bull market with increasing optimism that major med-tech markets are stabilizing, and it's not so hard to see why stocks like St. Jude Medical (NYSE:STJ) have seen solid runs and enjoy pretty favorable valuations today. In the case of St. Jude, while I have generally been on the side arguing that the Street was not giving the company enough credit for its long-term prospects, the move into the mid-$40s for the stock argues that the Street has in fact come up to speed.

With that in mind, St. Jude is going to need to start outperforming to drive a significantly higher multiple and share price.

Please read more here:
http://www.massdevice.com/blogs/massdevice/bulls-may-have-run-little-too-far-with-st-jude-medical

MassDevice: Can C.R. Bard Use A Windfall To Reignite Growth?

C.R. Bard (NYSE:BCR) has a problem; specifically, a growth problem. While the company has #1 or #2 market share in markets that make up over 80% of its revenue, a hugely consumables-oriented business, and a solid legacy when it comes to margins and returns on capital, Wall Street is a “what will you do for me tomorrow?” sort of place, and Bard's poor organic growth has kept a lid on the stock when so many other med-techs have enjoyed big runs.

Perhaps that can change, though. For starters, Bard has the opportunity to leverage past R&D and M&A with new products like a drug-coated balloon and an atrial fibrillation ablation system. Bard is also looking forward to a large cash settlement from Gore, a settlement that management has already earmarked in part for further growth-oriented M&A. This gives investments an interesting dilemma with these shares – the shares are only slightly undervalued on an “as is” basis, but factoring the settlement and potential leverage from that settlement (M&A that generates even more revenue, profits, and cash flow) makes the shares quite a bit more interesting.

Please follow this link for more:
http://www.massdevice.com/blogs/massdevice/can-cr-bard-use-windfall-reignite-growth

MassDevice: Is Valeant About To Make A Bold Bid For Bausch & Lomb?

Never let it be said that Valeant (NYSE: VRX) management is shy about doing deals. With a roster of past deals including Biovail, Cephalon, OraPharma, and Medicis, Valeant claims that better than 80% of its deals have attained the 20% internal return target it uses to evaluate potential transactions. If rumors out Friday prove true, Valeant is about to bag its biggest target yet in what would be a particularly bold move.

Multiple sources have reported (or repeated) rumors that Bausch + Lomb's private equity owners Warburg Pincus are near a deal to sell the eye care giant to Valeant in a deal worth close to $9 billion. That Bausch & Lomb is on the block is well known – Warburg Pincus hired Goldman Sachs back in December of 2012 to assist them, and reportedly approached companies including Sanofi (NYSE:SNY), GlaxoSmithKline (NYSE:GSK), and Abbott (NYSE:ABT) without getting any takers on the then-reported price tag of $10 billion. At that point, Warburg Pincus reportedly began considering an IPO of Bausch & Lomb to cash out of a company it originally acquired for $4.5 billion.

Please read more here:
http://www.massdevice.com/blogs/massdevice/valeant-about-make-bold-bid-bausch-lomb

MassDevices: Boston Scientific May Finally Be On The Right Path Again

It feels like Boston Scientific (NYSE:BSX) has spent the majority of the past decade in a perpetual limbo of ineffectual turnaround. The shares are down ⅔ over that period, while rivals and peers like Medtronic (NYSE:MDT), St. Jude Medical (NYSE:STJ), and Stryker (NYSE:SYK) have been flat, up 50%, and up 100%, respectively, over the same period. Worse still, Boston Scientific transformed from a market leader to a market laggard and squandered an immeasurable amount of credibility and investor goodwill.

Please follow this link for more:
http://www.massdevice.com/blogs/massdevice/boston-scientific-may-finally-be-right-path-again

MassDevice: Not A Lot Of Bargains Among Med-Tech Stocks

Medical technology stocks of all stripes have been enjoying a pretty exceptional run in the market, as healthcare has actually been 1 of the leading sectors in the recent rally. Unfortunately for investors, however, revenue, profits, and free cash flow have not been improving at the same rate, and the number of real bargains in the market has shrunk noticeably. While there are still a few opportunities that look undervalued, investors are increasingly finding themselves faced with a limited menu of attractive options.

Please read more here:
http://www.massdevice.com/blogs/massdevice/not-lot-bargains-among-medtech-stocks

MassDevice: The Strange Case Of The Diabetes Market

It wasn't so long ago when diabetes was one of the hot sectors of med-tech where many companies felt they had to have a presence, no matter what the cost. And while it is true that the incidence of diabetes continues to increase at worrisome rates in many countries, the diabetes market is no longer a “build it (or buy it), and the growth will come” type of proposition. It may not be quite true that diabetes as become a “winner takes all” sort of market, it is definitely a market where data, pricing, and marketing muscle make a big difference.

Please click below to continue:
http://www.massdevice.com/blogs/massdevice/strange-case-diabetes-market

MassDevice: Can Johnson & Johnson Fire On All Cylinders Again?

In what has become a red-hot stock market for med-tech stocks, it's the rare quality company that hasn't taken part in the rally. As a huge player in drugs, devices, and OTC consumer healthcare products, Johnson & Johnson (NYSE: JNJ) has certainly been carried along by this healthcare lovefest – the shares are up nearly 40% over the past year, and only a small handful of other large companies (Stryker (NYSE: SYK) and Roche (Nasdaq: RHHBY), for instance) can come close to matching or exceeding Johnson & Johnson.

The curious thing about this performance is that it hasn't accompanied strong, even financial performance. JNJ's drug business has roared back to life, but the device business continues to struggle with a difficult environment and past mistakes, while the consumer business tries to recover from the reputation and market share damage incurred by the spate of recalls and contamination problems a few years ago.

Please read more here:
http://www.massdevice.com/blogs/massdevice/can-johnson-johnson-fire-all-cylinders-again

MassDevice: Edwards Lifesciences Comes Back Down To Earth ... Hard

Although I had been writing for some time that I thought Edwards Lifesciences (NYSE: EW) was significantly overvalued by the market, I don't take any particular pleasure in seeing the stock down almost one-quarter over the past year and year-to-date in 2013. Even so, it's a valuable reminder as to the risks of getting a little too bullish about first movers in fast-growing markets and the danger of the idea that “valuation doesn't matter”.

While the valuation has indeed come down significantly for Edwards, so too have the growth expectations. I do believe the market for transcatheter heart valves will exceed $4 billion in 2020 and that Edwards will remain the market leader. With free cash flow likely to grow at a low-teens rate and the stock slightly below fair value, these shares look interesting for more risk-tolerant investors.

Please read the full article here:
http://www.massdevice.com/blogs/massdevice/edwards-lifesciences-comes-back-down-earth-hard

MassDevice: Looking Back On A Pretty Sedate ACC

Sometimes the major annual medical meetings are jam-packed with significant and market-moving data. And then sometimes they're like this year's American College of Cardiology conference, with relatively limited useful data from an investing perspective.

While there was some incremental data relating to significant emerging growth markets like transcatheter valve replacement and renal denervation, the most significant data concerns one of the more uncertain market opportunities – left atrial appendage occlusion/closure.

Please follow this link for more:
http://www.massdevice.com/blogs/massdevice/looking-back-pretty-sedate-acc?page=show

MassDevice: The Chinese Medical Device Market Driven By Both Growth And Value

In recent years, medical device companies in the U.S. and Europe have woken up to what pharmaceutical, industrial, and consumer goods companies have known for some time – China is a major growth opportunity. Even more recently, we've seen several well-known device companies step into the market more directly by buying domestic Chinese device companies. While China is indeed a huge potential device market, the realities of the market mean that companies who can focus on value may in fact be the ones best-positioned for growth.

Please follow this link for the full piece:
http://www.massdevice.com/blogs/massdevice/chinese-medical-device-market-driven-both-growth-and-value?page=show

MassDevice: What Has Earnings Season Told Us About Med-Tech?

As the dust settles after another earnings season, it's time to look back at what we now know about the state of the industry. Stocks in the sector have been enjoying a run that started in November 2012 on hopes for improving utilization trends and earnings in 2013.

While the results and guidance from this latest round of earnings suggest that expectations around utilization may have been a bit too optimistic, it does look like the industry is on firmer footing than a year ago.

Please click here for more:
http://www.massdevice.com/blogs/massdevice/what-has-earnings-season-told-us-about-medtech?page=show

MassDevice: When It Comes To Robots, Opinions Run Hot

Robots may not have emotions, but that's certainly not the case when it comes to the investors, doctors, and other associated people who are involved in the surgical robotics market. From promises that robots open up new avenues in surgery that are better and more comfortable for patients to accusations that robots are dangerous and unnecessary, it often feels like the middle ground is perilously thin these days. While the utilization rates don't point to robots disappearing anytime soon, investors in Intuitive Surgical (NSDQ:ISRG) and Mako Surgical (NSDQ:Mako) are likely looking at plenty of volatility and debate for years to come.

Please click below to continue:
http://www.massdevice.com/blogs/massdevice/when-it-comes-robots-opinions-run-hot