Lu Rahman looks at some of the stand-out M&A activity to hit the medtech sector in the last year.
Mergers
Pick up any end-of-year prediction article in the medtech sector and mergers and acquisitions ranks highly. From one year to the next news of deals between high calibre companies operating in the medical device sector never fails to provoke discussion.
As medtech companies look to future trends, the appeal of acquiring a business that offers additional revenue streams or enter new markets is highly appealing.
DePuy Synthes Products, part of Johnson & Johnson Medical Devices Companies. Recently acquired Innovative Surgical Solutions (Sentio), which markets innovative nerve localisation technology for spine surgery. According to DePuy Synthes the acquisition underscores the business’ strategy of investing in what it describes as “faster growing segments with technologies that are designed to help improve patient outcomes and bring value to our customers”.
"With Sentio's nerve localisation technology, DePuy Synthes will strengthen its spine portfolio in decompression procedures as well as lateral surgery, and build a platform for future innovation in minimally invasive surgery," said Ciro Römer, company group chairman, DePuy Synthes.
DePuy Synthes has also splashed out on 3D printing technology from Tissue Regeneration Systems (TRS). TRS’ 3D printing methods will help enable DePuy Synthes to create patient-specific, bioresorbable implants with a mineral coating intended to support bone healing in patients with orthopaedic and craniomaxillofacial deformities and injuries.
Depuy Synthes says that the acquisition brings exciting new technology with the potential to personalise healthcare solutions in trauma.
“We are systematically investing in building a pipeline of 3D printed products,” said Römer. “The TRS technology, which will be added to the DePuy Synthes Trauma Platform, is the latest example of how we are working toward developing next-generation technologies that transform healthcare delivery with individualised solutions for patients.”
It isn’t just medtech companies that are looking to acquisitions to increase opportunity. Allergan subsidiary, Allergan Sales recently agreed to acquire Keller Medical, a medical device company and developer of the Keller Funnel. This cone-shaped, plastic funnel reduces surgeon and patient contact during breast augmentation or reconstruction procedures.
"This is a natural complement to our world-class plastic surgery and regenerative medicine business, and marketing this innovative device further enhances our commitment to our customers and patients."," said David Moatazedi, senior vice president of Medical Aesthetics at Allergan.
Opportunities in digital devices
The connected health market is burgeoning so it’s no surprise that many companies are eyeing opportunities in this space. Last year the major drug delivery player Phillips-Medisize announced the acquisition of Medicom Innovation Partner of Denmark and its subsidiary in Cambridge, UK.
Medicom specialises in connected health drug delivery devices employs a staff of 90 specialists in Denmark and the UK. This means that Phillips-Medisize now employs about 500 engineers throughout its global design and development network with hubs in Struer, Denmark and Hudson, WI, USA to develop injectable and inhalation devices for the global market.
Later in the year it was Phillips-Medisize itself which was the subject of an acquisition when global manufacturer of connectors and interconnectors, Molex, bought the company.
Martin Slark, chief executive officer of Molex said: “Phillips-Medisize brings strong capabilities to Molex in the medical solutions market globally. Combining Molex’s expertise in electronics and our broad manufacturing presence with Phillips-Medisize’s talented and experienced team will help us better serve the growing needs of the global market for innovative connected health solutions.”
Adding value to business and enhancing areas of production have been key drivers for many of the sectors M&A activity. Last autumn Nolato agreed to acquire Polish Grizzly Medical, which is involved in the assembly, post-processing and quality assurance of medical device components and systems. The company has been a supplier to and partner of Nolato Medical since the 1990s.
“This is a relatively small but strategically important acquisition that boosts our capacity in the low-volume, clean room-based production segment, including assembly and post-processing, giving us an even more comprehensive customer offering,” said Nolato president and CEO Christer Wahlquist.
Other acquisitions throughout the year included Nelipak’s purchase of thermoforming company Computer Designs Incorporated. Operating under the name Nelipak Healthcare Packaging, Nelipak said the acquisition strengthens its commitment to the North American healthcare market.
The rate of M&A activity shows little sign of abating as businesses look to build on existing success with additional services and products. For that reason companies that offer a strong growth prognosis or potential to provide a competitive edge are the ones that may well stand out as ripe financial picking.