The deal includes an up-front cash payment of $160 million as well as unspecified milestone-based payments, according to a press release.
The deal plays into the company’s relatively new ambition to broaden its scope beyond pure medical devices. Medtronic in August paid $200 million for Cardiocom LLC in cash in a bid to get into the disease management business and in September launched its ‘Hospital Solutions’ business.
The moves signal Medtronic’s continued foray into a larger healthcare arena, a choice that some Wall Street analysts warned may also suggest "challenging times ahead" for the device industry.
Newly acquired TYRX comes with a portfolio of FDA-cleared products, including the AIGISRx N antibacterial envelope as well as the newly cleared AIGISRx R fully resorbable antibacterial envelope. The products are designed to prevent surgical site infections, the AIGISRx N in spinal cord neurostimulator implantation and the AIGISRx R in surgeries for cardiac implantable electronic devices.
Surgical infections account for significant costs to the healthcare system, not to mention the risk to patients, and the risk increases when patients undergo additional surgeries beyond the device implant.
"While the risk of infection from an implanted pacemaker or defibrillator is low for most patients, repeated operative procedures after the initial device implant are associated with a substantial incremental risk of infection," Medtronic cardiac rhythm disease management president and senior vice president Pat Mackin said in prepared remarks. "This is estimated to cost the U.S. healthcare system more than $1 billion per year."
MDT shares started out strong this morning and were up 1.7% as of about 11:55 a.m. when they were trading at $59.33 apiece. Medtronic’s stock has gained about 3.7% since the start of the year.