Medtronic to Acquire TYRX - Analyst Blog


Medtronic, Inc. ( MDT ) recently announced its plans to acquire privately held, NJ-based company, TYRX, Inc. TYRX is engaged in manufacturing of implantable combination antibiotic drug and implanted medical devices.  Following the announcement, shares of MDT moved north by 1.05%, ending the session at $59.84 as on Jan 7, 2013.

MDT expects the transaction to remain neutral to fiscal 2014 earnings. However, the deal has been finalized at an upfront payment of $160 million. Additional payments are to be made based on successful meeting of sales targets.

In the face of tough competition, Medtronic is resorting to several means like portfolio expansion, and penetration in emerging markets to support its long term objectives and simultaneously drive growth.

TYRX develops unique products to reduce the rate of infections associated with surgeries. It also specializes in the making of implanted medical devices like pacemakers. Medtronic's acquisition is thus a strategic move toward facilitating entry into a broader healthcare services and solutions market.

The idea is to cater to the large base of patients who are highly susceptible to infections due to repeated operative procedures. However, though the risk of infection is considerably lowered by an implanted pacemaker or defibrillator, chances cannot be ruled out totally.

With access to TYRX's proven technology, Medtronic will also be able to cut down healthcare cost significantly and simultaneously provide cost efficient and quality patient outcomes.

Recently, TYRX received FDA clearance for two most of its most innovative products. One of them is the AIGISRx R Fully Resorbable Antibacterial Envelope, designed to reduce surgical site infections associated with Cardiac Implantable Electronic Devices (CIEDs).The other one is AIGISRx N Antibacterial Envelope, for use with spinal cord neuromostimulators.

Strategic investments such as this are believed to augment revenues at both of Medtronic's operating segments, namely, the Cardiac & Vascular Group and the Restorative Therapies Group.  

Currently, Medtronic carries a Zacks Rank #3 (Hold).Investors interested in the medical products industry can look into stocks like INSYS Therapeutics, Inc. ( INSY ), Hill-Rom Holdings, Inc. ( HRC ), and Wright Medical Group Inc. ( WMGI ), each carrying a Zacks Rank #2 (Buy).

HILL-ROM HLDGS (HRC): Free Stock Analysis Report

INSYS THERAP (INSY): Free Stock Analysis Report

MEDTRONIC (MDT): Free Stock Analysis Report

WRIGHT MEDICAL (WMGI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: HRC , INSY , MDT , WMGI

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