Boston Scientific (NYSE:BSX) recently broadened its Endoscopy portfolio with the buyout of a privately-held company — EMcision, Limited — with presence in the U.K. and Canada. Although the financial terms of the deal have been kept under wraps, the company expects the deal to prove accretive to earnings post 2018.
Post-acquisition, Boston Scientific’s Endoscopy portfolio will include EMcision’s FDA approved and CE Marked Habib EndoHPB probe. Notably, Habib EndoHPB probe is an innovative endoscopic bipolar radiofrequency device that coagulates tissue in the gastrointestinal (GI) tract. Moreover, the Habib EndoHPB probe aids in the treatment and palliative care of patients diagnosed with pancreaticobiliary cancer.
A Glimpse of the Endoscopy Business
Boston Scientific’s Endoscopy division develops and manufactures devices to treat a variety of digestive diseases, including those affecting the oesophagus, stomach, liver, pancreas, duodenum and colon. Revenues at this division rose 14.8% year over year to $436 million in the last reported quarter.
The upside was driven by strength in the biliary, hemostasis and EndoChoice ambulatory surgery center portfolio. The company also witnessed organic revenue growth of 10% at the segment.
Last November, Boston Scientific completed the integration of EndoChoice into the Endoscopy business. Acquired in 2016, EndoChoice Holdings, focuses on the development and commercialization of pathology services, infection control products and single-use devices for treating a variety of gastrointestinal conditions.
Thus, we believe the latest buyout will help Boston Scientific boost top-line contributions from the Endoscopy business.
Market Prospects
Per a Market Data Forecast report, the global pancreatic cancer therapeutics market is projected to reach a value of $2.99 billion by 2021, at a CAGR of 7.5%, during the 2016-2021 period. The upbeat prospects of the market are primarily based on rising consumption of tobacco, unhealthy lifestyle practices like smoking, an aging population and obesity.
Per the company, around one million deaths annually can be attributed to pancreaticobiliary cancer globally. Thus, the addition of Habib EndoHPB probe will help Boston Scientific cash in on the abundant opportunities in the pancreatic cancer therapeutics market.
Share Price Movement
Over the past three months, Boston Scientific has been outperforming its industry. The stock has gained 8.6% compared with the industry's 4% gain.
Zacks Rank & Key Picks
Boston Scientific carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical sector are Bio-Rad Laboratories (NYSE:BIO) , PetMed Express (NASDAQ:PETS) and PerkinElmer (NYSE:PKI) .
Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.
PetMed has a long-term expected earnings growth rate of 10% and a Zacks Rank #1.
PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).
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