Medtronic Buys Aptus Endosystems, Strengthens EVAR Base - Analyst Blog
As part of its latest acquisition spree, Medtronic plc MDT has purchased the assets of California-based Aptus Endosystems for $110 million. This privately-held medical device manufacturer specializes in providing minimally invasive solutions to treat abdominal aortic aneurysms (AAA).
The buyout is in line with Medtronic’s efforts to bolster its footprint in the billion-dollar endovascular aneurysm repair (EVAR) market.
Post acquisition, the Aptus business will become a part of Medtronic’s Aortic and Peripheral Vascular division within the Cardiac and Vascular Group. Although additional terms of the transaction remain undisclosed, Medtronic expects this deal to meet its long-term financial metrics for acquisitions.
Under the terms of the deal, Medtronic will distribute Aptus’ TourGuide Steerable Sheath – a device with an adjustable tip that enables quick access and delivery of peripheral vascular products to the most challenging anatomy – in the U.S. and Europe. The newly gained distribution right will naturally increase Medtronic’s revenues earned from its Aortic and Peripheral Vascular business division.
We take a note that AAA (an abnormal enlargement of one’s abdominal aorta) affects approximately 200,000 U.S. citizens every year, most of them being Caucasian males aged 65 or higher. The AAA patient population at present touches an estimated count of 1.5 million. On the other hand, traditional open surgery repair of AAA is considered fatal due to the high procedure-related mortality rates and long patient recovery times experienced in cases earlier.
Taking into consideration the huge and fast growing market for AAA, we are upbeat about this latest tuck-in acquisition by Medtronic. Aptus’ devices for EVAR and thoracic endovascular aneurysm repair (TEVAR) offer a minimally invasive alternative to open surgery for the repair of AAA conditions. These boast reduced recovery times and potentially improved survival rates.
With the complementary, anchor technologies like Heli-FX and Heli-FX Thoracic EndoAnchor systems now in its kitty, Medtronic will be able to cater to patients with complex aortic disease as well. We believe this will augment the demand for Medtronic’s endovascular products.
The Aortic and Peripheral Vascular business is an important growth driver at Medtronic. With the global EVAR market slated to deliver $5 billion in annual sales by 2020, we believe Medtronic is poised to emerge as a major player in the space, backed by the aforementioned developments.
Currently, Medtronic carries a Zacks Rank #3 (Hold). Some better-ranked medical product stocks are Bio-Rad Laboratories, Inc. BIO, Hospira Inc. HSP and INSYS Therapeutics, Inc. INSY. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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