) 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.
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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
INSYS Therapeutics, Inc.
Hill-Rom Holdings, Inc.
Wright Medical Group Inc.
), each carrying a Zacks Rank #2 (Buy).