New Medical Device Technologies Come From Smaller Companies, are Acquired by the Larger Players: Expert Analyst Raj Denhoy Discusses His Outlook on the Space with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - August 6, 2013 - The Wall Street Transcript has just published its Medical Devices Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Orthopedics and Cardiovascular Medical Devices - Medical Device Innovation and Consolidation Trends - Cardiac - Health Care - Affordable Care Act - Continued Pricing Pressure - Aging U.S. Population

Companies include: Medtronic, Inc. (MDT), Boston Scientific Corporation (BSX), St. Jude Medical Inc. (STJ), Zimmer Holdings Inc. (ZMH), Stryker Corp. (SYK), Covidien, Ltd. (COV), Edwards Lifesciences Corp. (EW), Insulet Corporation (PODD), ResMed Inc. (RMD) and many more.

In the following excerpt from the Medical Devices Report, an expert analyst discusses the outlook for the sector for investors:

TWST: As we look out, and hopefully things get a little more settled, what kind of growth is the industry capable of generating?

Mr. Denhoy: I think the larger, more mature companies - and here I'm talking about companies like Medtronic (MDT) and Boston (BSX) and St. Jude (STJ), Zimmer (ZMH), Stryker (SYK) to a great degree, even Covidien (COV), names like that - I mean, just given the size of those companies and their relative exposure to a lot of those slow-growth markets, they have to be thought of as low-single-digit-growth kind of businesses, low-to-mid for the most part.

But having said that, there are still categories that get created which grow faster, things like transcatheter valves or heart support pumps or some of the insulin delivery and testing devices; so there are still categories that have growth, but they tend to be newer technologies that are underpenetrated. So there still are certainly veins that can be tapped, and people are trying to find that better performance, but it's getting more difficult to find.

TWST: Are these newer technologies coming out of smaller companies, or are some of the bigger guys playing in the space?

Mr. Denhoy: Mostly it comes from small companies, and we've seen a lot of it get acquired by the big companies. As I mentioned, one of the big responses to the slower growth in the sector has been to try and find new engines of growth, and for a lot of these companies that has come through acquisition.

They are trying to acquire some of these more interesting technologies with the hopes that over time they'll get large enough to sort of offset some of that slowing in the larger, more mature segments. It hasn't happened to a great degree, but I think a lot...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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