Medtronic Makes Several Acquisitions Post Covidien Merger
Acquisitions mostly focus on early technologies in the U.S. Below you can find an overview of several companies that Medtronic has already acquired or invested in.During much of 2014, Medtronic CEO Omar Ishrak insisted that the company moving its headquarters to Ireland through a merger with Covidien was a good thing. While pundits speculated that the company would slow down its M&A activity following the deal, Ishrak stressed that the company would continue to invest in U.S.-based industry.Medtronic appears to be already making good on that promise when it comes to acquiring young companies with innovative technologies. Its Friday announcements of a $93 million deal to buy CardioInsight Technologies (Cleveland) and a $110 million purchase of Aptus Endosystems (Sunnyvale, CA) are but the latest in a string of acquisitions and investments announced since Medtronic closed on the $48 billion Covidien deal in January.Medtronic has the money to continue buying, too: It has $6.5 billion to $7 billion in free cash flow this year, chief financial officer Gary Ellis told analysts during an early June conference call. Ishrak made it clear that he’s interested in snapping up new technologies.“Using extra access we have to that cash, we stated that we’re going to look at early technologies in the U.S. primarily where there maybe opportunities which we haven't been able to participate into the degree that we’d like to, to create a longterm technology pipeline of early stage technologies that we think can make a difference,” Ishrak said in the call, transcribed by Seeking Alpha.Here are six technologies Medtronic has acquired or invested in so far:1. CardioInsight’s Heart Monitoring VestAn illustration of the Ecvue vest, as shown on CardioInsight's websiteUnder Obamacare, there is a big push for U.S. health systems to better manage patient populations to prevent more costly health problems from cropping up down the road. Better tracking of chronic conditions such as heart disease and diabetes is one solution.CardioInsight, which Medtronic announced it is acquiring on Friday, has an intriguing product in the area: a single-use, disposable multi-sensor “vest” to capture electrical heart signals from the body surface. CardioInsight also has software that turns the data into epicardial 3-D electroanatomic maps and virtual electrograms. The Ecvue vest could be used inside or outside of an electrophysiology lab."This investment aligns with our goal to deliver breakthrough technologies for patients who have atrial fibrillation and other arrhythmias," Reggie Groves, vice president and general manager of Medtronic’s AF Solutions business, said in a news release.2. Complementary Aortic Repair TechnologyAptus Endosystems, which Medtronic is acquiring for $110 million, has technologies for endovascular aneurysm repair (EVAR) and thoracic endovascular aneurysm repair (TEVAR). Its Heli-FX and Heli-FX Thoracic EndoAnchor systems include an endovascular-deployed anchor designed to attach a variety of aortic endografts to a vessel wall. "The Heli-FX and Heli-FX Thoracic EndoAnchor systems strongly align with our strategy to invest in treatments that address complex aortic disease with a vision to treat disease of the entire aorta," Daveen Chopra, vice president and general manager of Medtronic's Aortic business, said in a news release.3. Arsenal Medical’s Foam to Stop Internal BleedingA scanning electron micrograph (SEM) of Arsenal foam (Image courtesy of Arsenal Medical)Medtronic is also showing a great deal of interest in materials innovations. It announced Wednesday that it is investing an undisclosed amount of money in Arsenal Medical’s Arsenal AAA LLC and its proprietary polymer based foam that has shown potential to stop leaking around an endograft placed inside a weakened, bulging artery.Arsenal Medical (Watertown, MA) counts MIT professor Robert Langer among its founders. It has developed in-situ forming foams to treat acute hemorrhage and other critical clinical conditions including vascular injury and repair."The investment will allow Arsenal AAA to utilize its expertise in foam technologies to address persistent endoleaks that can occur after endovascular aneurysm repair (EVAR) procedures," said Daveen Chopra, vice president and general manager of Medtronic’s Aortic division, said in a news release.4. Moving Into Diabetes Care ManagementHealth providers’ increased interest in better managing health in populations means that medical device manufacturers such as Medtronic are becoming service providers. Medtronic officials no longer want the company be just a pacemaker manufacturer or an insulin pump maker; the company is becoming a chronic disease management company.It makes sense, then, that Medtronic announced in April that it was acquiring Diabeter, a Netherlands-based diabetes clinic and research center that is providing comprehensive and individualized care for children and young adults with diabetes. "This acquisition marks Medtronic's first entry into a diabetes integrated care model approach and signifies that Medtronic Diabetes is more than pumps and sensors - we are a holistic diabetes management company focused on making a real difference in outcomes and cost,” Hooman Hakami, executive vice president and president of the Diabetes Group at Medtronic, said in a news release.5. Sophono’s Magnetic Hearing ImplantsMedtronic announced in March that it was buying Boulder, CO–based Sophono and its minimally invasive magnetic hearing implants technology for an undisclosed sum.The magnetic bone conduction hearing implants were already available in 42 countries and had been implanted in more than 4000 patients, Medtronic said at the time.6. Neuromodulation InnovationNeuromodulation remains a big, growing business in the new Medtronic, pulling in about a half a billion dollars in revenue for the quarter ended April 14. That was about one fourteenth of total revenue.Medtronic announced in February that it had spent an undisclosed sum to buy Advanced Uro-Solutions (Elizabethton, TN), a privately-held developer of neurostimulation products for the treatment of bladder control issues.The Nuro percutaneous tibial nerve stimulation system has FDA 510(k) clearance to treat patients with overactive bladder (OAB) and associated symptoms of urinary urgency, urinary frequency and urge incontinence. Medtronic said at the time that it was preparing to launch the Nuro in the U.S. within the next 12 months."Medtronic continues to invest in fully-implantable bladder control and bowel control therapies, and the addition of the Nuro system to our existing portfolio of products will introduce more people suffering from bladder control issues to the benefits of neuromodulation,” Linnea Burman, vice president and general manager, gastro/urology therapies at Medtronic, said in a news release.
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