Boston Scientific mum on reported Stryker takeover move

June 12, 2018
by Thomas Dworetzky, Contributing Reporter
Boston Scientific is mum on Stryker's alleged takeover bid, initially reported by The Wall Street Journal, according to CNBC.

In an SEC filing Boston Scientific said only that it “is aware of reports speculating that the company has been approached by Stryker Corporation regarding a potential acquisition," the news channel reported, noting that the company also stated that, as was its practice, it “does not comment on market rumors or speculation."

A Stryker spokesman told CNBC that the company won't comment on possible moves.

The possible deal would bring together two giant medical device makers with a value of over $110 billion, according to the Journal, which cited unnamed sources. No news yet whether the offer will get a warm or chilly reception.

Boston Scientific has a market capitalization of $47.6 billion, according to CNBC. Stryker's market capitalization is $64.9 billion

The deal would give the pair the heft to take on medical device colossus Medtronic, with a $117.3 billion market value.

Together the pair could offer a range of devices, including orthopedic products and cardiac products, like pacemakers.

The two have overlap in some areas, including implantable spinal cord stimulators for chronic pain.

BMO Capital Markets analyst Joanne Wuensch told CNBC that were they to join together it would represent a last "major puzzle piece" acquisition in the med tech industry consolidation.

But J.P. Morgan analyst Robbie Marcus cast some shade on the possible deal, stating that his team "aren't big believers" in “bigger is better,” and opined in his letter that Stryker was running smoothly as it is, and Boston would not necessarily be interested, and also raised the prospect of additional bidders entering the fray, according to the business news station.

Both companies have been active in the acquisition arena lately.

In May, Stryker’s Sustainability Solutions division announced the completion of its acquisition of Hygia Health Services, which focuses on reprocessing patient care single-use devices (SUDs) in the U.S., according to a company statement.

“In line with our commitment to help hospitals and health systems increase the value their SUD reprocessing programs deliver, this acquisition will enhance our ability to deliver savings to our customers,” said Brian White, president, Stryker’s Sustainability Solutions division. “Furthermore, our broader product portfolio will help customers elevate their sustainability goals and set a higher bar for sustainable healthcare delivery.”

And in January, Stryker teamed with 3D Systems to provide greater access to personalized surgical planning and techniques for healthcare professionals.

The partnership focuses on the development and distribution of virtual surgical planning and anatomical models for the craniomaxillofacial specialty, to reduce hours that surgeons and patients spend in the operating room.

“For the first time you can pre-plan surgery for patients before going to the operating room. This enables real surgical planning,” Katie Weimer, vice president of medical devices at 3D Systems, told HCB News. “Once in surgery, surgeons are better prepared. In fact, prior to operation, the surgeon is able to try multiple techniques on the computer. That way they're making the best plan for the patient ahead of time.”

In October, 2017, Stryker's Sustainability Solutions division cut a deal with Philips to offer customers the option to purchase new and reprocessed Philips ECG leads for one low price.

"SUD reprocessing diverts millions of pounds of medical waste from U.S. landfills every year," White told HCB News at the time. "It’s among the most impactful hospital waste reduction initiatives."

In April, Boston Scientific showed its acquisition chops when it acquired nVision Medical Corporation, a privately-held company focused on women's health. nVision developed the first and only device cleared by the U.S. Food and Drug Administration to collect cells from the fallopian tubes, offering a potential platform for earlier diagnosis of ovarian cancer.

"We estimate the near-term market opportunity to be $500 million with the potential to grow to $2 billion as this device is used by more gynecologists to help even more women," said Dave Pierce, executive vice president and president, MedSurg, Boston Scientific.

Also in April, the firm acquired Securus Medical Group, a privately-held company that has developed a thermal monitoring system for the continuous measurement of esophageal temperature.

The thermal monitoring system developed by Securus Medical Group is an integrated catheter-based probe and imaging system that generates real-time images of the temperature of the esophagus.

"In contrast to current standards of care for esophageal temperature monitoring that measure temperature at one or a few fixed locations and have a slow temporal response, this system continuously reads the temperature of the esophagus from thousands of points and provides physicians with an intuitive 360 degree view that refreshes every second," said Steven Girouard, Ph.D., president and chief executive officer, Securus Medical Group. "Further, the system does not require tissue contact for accurate temperature readings, allowing for simplified, one-time positioning of the probe."

Also in October, 2017, Boston Scientific agreed to acquire Apama Medical for $300 million.

The acquisition of the privately-held, California-based company will allow Boston Scientific to expand its electrophysiology portfolio, combining its radiofrequency point-by-point solution with Apama’s single-shot balloon ablation technology for the treatment of atrial fibrillation (AF).

“Single-shot pulmonary vein isolation (PVI) ablation is a high-growth market segment,” Joe Fitzgerald, president of rhythm management at Boston Scientific, told HCB News. “Our current electrophysiology (EP) portfolio includes a radiofrequency (RF) point-by-point solution, and the Apama technology, upon regulatory approval, will allow us to expand into the single-shot market segment, and ultimately bolster our entire EP portfolio.”