Jun. 15, 2014, 9:37 PM
- Confirming earlier reports, Medtronic (MDT) is buying Covidien (COV) in a cash and stock deal valuing Covidien at $93.22 per share based on Medtronic's Friday close of $60.70. The price represents a near-30% premium to Covidien's Friday close.
- The transaction will have each share of Covidien converted into the right to receive $35.19 in cash and 0.956 shares of Medtronic.
- Medtronic expects the purchase to be accretive to cash earnings in the first fiscal year following the close (late this year, or early next), and significantly accretive thereafter, with $850M of annual pre-tax cost synergies by the end of fiscal 2018.
- As noted earlier, the purchase will have Medtronic moving its principal executive offices to Ireland, where corporate tax rates are lower than the U.S.
- Press release
- Previously: Medtronic in talks for $40B+ Covidien deal
Jun. 15, 2014, 10:59 AM
- Medtronic (MDT) is in advanced talks to buy Covidien (COV) for more than $40B. The deal could be announced as early as tomorrow.
- The tax inversion will allow Medtronic to be domiciled in Ireland, where Covidien is based, and permit the company to pay a lower corporate tax rate.
- Medtronic has a current market value of $61B, and Covidien is valued at $32B.
Jun. 12, 2014, 3:44 PM
- The FDA approves Medtronic's (MDT -0.6%) transcatheter aortic valve replacement (TAVR) CoreValve System for patients at high risk for open-heart surgery. Its original indication, approved in January 2014, is for patients at extreme risk for open-heart surgery. The basis for the expanded label was a Phase 3 clinical trial comparing TAVR using CoreValve to traditional surgical aortic valve replacement. One-year survival in patients receiving the CoreValve System was 85.8% vs 80.9% for patients receiving the traditional procedure. The results were statistically significant.
- The Medtronic device competes directly with Edwards Lifesciences' (EW -3.1%) Sapien TAVR system. Last month, MDT agreed to pay EW $750M plus royalties to settle patent infringement claims.
Jun. 10, 2014, 12:03 PM
- Based on the findings of an independent committee that investigated shareholder claims that Medtronic (MDT -1.2%) underreported the side effects of its Infuse bone growth stimulation product, the company decides not to pursue claims against current and former executives, directors, employees and physician consultants. The committee concluded that pursuing legal action would not be in the company's best interests.
- The committee was formed two years ago and included a retired Minnesota state judge and corporate law professor.
- MDT will seek the dismissal of two consolidated shareholder lawsuits.
- Its problems aren't over, though. Last week, Humana filed suit against the company accusing it of falsely representing the product.
Jun. 4, 2014, 2:25 PM
- Bloomberg reports Medtronic (MDT +3.8%) is mulling a buyout offer for knee/hip implant maker Smith & Nephew (SNN +8.6%). SNN and i-banks are said to be "aware of Medtronic's interest.".
- The news service cautions Medtronic's prep work is at an early stage, and that "no offer is imminent." Nonetheless, Medtronic is viewed as "a more serious bidder" for SNN than Stryker (SYK -0.1%), previously rumored to be weighing an offer.
- Sources state a deal would likely result in Medtronic using SNN's corporate shell to change its legal residence to the U.K., and thereby take advantage of lower tax rates. Medtronic, which has a large offshore cash balance, has previously said it's open to a tax-inversion deal.
- Shares of both companies have spiked higher following the report. SNN's market cap is currently at $17B.
May. 20, 2014, 9:06 AM
- Medtronic (MDT) net profit -54% to $448M, hurt by the patent agreement with Edwards Lifesciences and a product-liability settlement.
- Sales breakdown: international +3% to $2.145B (47% of total), Emerging market +10% to $571M (13% of total).
- Cardiac & Vascular worldwide sales +1% to of $2.37B; Restorative Therapies +2% to $1.74B; Diabetes +13% to $460M.
- Expects FY 2015 EPS to grow 6-9% to $4.00-4.10 vs consensus of $4.09 and revenue growth of 3-5% at constant currencies. FY 2014 revenues were $17B. Analyst expectations for 2015 revenue are $17.64B.
- Shares are -0.15% premarket. (PR)
May. 20, 2014, 7:42 AM
May. 20, 2014, 7:29 AM
- Edwards Lifesciences (EW) and Medtronic (MDT) settle their patent disputes regarding transcatheter heart valves. They agree to dismiss all pending cases and appeals in courts and patent offices worldwide and not litigate patent disputes between them in the field of transcatheter valves for the duration of the eight-year term of the settlement.
- Under the terms of the agreement, Medtronic will make a one-time payment to Edwards of $750M and make quarterly royalty payments through April 2022 based on a percentage of Medtronic CoreValve sales subject to a minimum of $40M/year.
- Edwards will contribute $50M from the settlement to its Every Heartbeat Matters philanthropic program.
May. 19, 2014, 5:30 PM
May. 12, 2014, 1:01 PM
- Results from Medtronic's (MDT +1.2%) MINERVA clinical study show that its ATP algorithm reduces the development of persistent atrial fibrillation by 58% compared to standard pacemakers. The algorithm restores the heart back to its normal rhythm by pacing during abnormally fast atrial rhythms. In the study, it played a significant role in slowing the progression of the disease by successfully terminating atrial tachycardia/atrial fibrillation episodes.
- The company believes that the reduction in these episodes could save $1,218 in healthcare costs per patient over a 10-year time frame.
May. 7, 2014, 12:18 PM
- The FDA approves the Entovis pacemaker system with ProMRI technology made by Berlin, Germany's Biotronik. The device allows patients to undergo MRI scans with a limited exclusion zone. Entovis patients need only to alert radiology staff and they will verify that they are eligible to undergo the imaging. The company believes that this is a significant advantage over MRI-conditional pacers. The FDA's approval covers both single and dual chamber pacemakers when implanted with Setrox leads.
- Recent research finds that there is a 50 - 75% probability that patients implanted with a pacemaker or defibrillator will need an MRI at some point in their lives.
- (BSX) (MDT) (STJ)
Apr. 22, 2014, 7:22 AM
- In a short 2-1 decision, the U.S. Court of Appeals for the Federal Circuit rules that Medtronic (MDT) may continue selling the CoreValve System until it makes its final decision sometime this summer. The Court did not explain the basis for its ruling but Medtronic argued that implementing the injunction would put patients' lives at risk.
- The company's patent dispute with Edwards Lifesciences (EW) has clinicians scrambling for alternatives because Medtronic offers its device in a larger number of sizes and is appropriate for those patients who do not have the correct anatomy for the Edwards product.
- Edwards '552 patent expired in May 2012 but the USPTO has issued three one-year extensions. A final extension has yet to be issued.
- Medtronic believes the patent rights are limited.
Apr. 19, 2014, 11:17 PM
- With the injunction preventing Medtronic (MDT) from selling its CoreValve System taking effect in just a few days on April 23, the company asks the U.S. Court of Appeals to postpone the order until the firm can determine if the injunction was properly issued. The Court has yet to rule but it did grant its request for an expedited review of its appeal.
- The firm and Edwards Lifesciences (EW) are currently negotiating a mechanism whereby clinicians currently trained on CoreValve can make patient-specific decisions regarding whether to implant Medtronic's device or Edwards' without being constrained by CoreValve's availability. The companies must report their status on the issue to the Court on May 21 although they can implement a plan earlier based on mutual agreement.
- Medtronic believes that Edwards and the Court have inappropriately applied provisions of patent term extension regarding the Anderson '552 patent which expired in May 2012.
Apr. 15, 2014, 6:25 PM
- Surgical device maker ConMed (CNMD) is exploring a sale of the company, Reuters reported earlier today, after activist investors late last year took issue with its performance and corporate governance.
- The company's advisers, BoA Merrill Lynch and Greenhill, reportedly have contacted orthopedic device makers in recent weeks to gauge interest.
- CNMD has an attractive orthopedics and sports medicine business that could appeal to companies such as Zimmer Holdings (ZMH), Johnson & Johnson (JNJ), Stryker (SYK), Covidien (COV) and Medtronic (MDT).
- CNMD shares gained 7.2%, rallying from a loss before the report late in the session.
Apr. 14, 2014, 8:01 AM
- The U.S. District Court in Delaware grants a preliminary injunction limiting the sale of Medtronic's (MDT) CoreValve system in the U.S. The order will go into effect in seven days.
- The court's ruling reaffirms an earlier decision that CoreValve infringes on Edward Lifesciences' (EW) U.S. Anderson patent.
- The judge orders both companies to confer on the specific instances where CoreValve can continue to be used on U.S. patients at medical centers trained on Medtronic's device.
- The litigation began in 2008. In late 2013, the U.S. Supreme Court declined to hear MDT's appeal.
- In a separate case, a federal jury in January found CoreValve infringes in EW's U.S. Cribier patent.
- EW is up 13% premarket while MDT is down ~5%, both on light volume.
Apr. 11, 2014, 8:34 AM
- The FDA approves Medtronics' (MDT) CRT devices to treat patients with atrioventricular (AV) block and left ventricular systolic dysfunction.
- Patients designated as New York Heart Association Class I, II and III with AV block that need a high percentage of ventricular pacing and have an ejection fraction <=50% will now be able to receive biventricular pacing with the company's CRT devices.
- More than 1M Americans suffer from AV block.
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Medtronic PLC is engaged in providing medical technology alleviating pain, restoring health, and extending life of people. It currently functions in three operating segments that manufacture and sell device-based medical therapies.
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