AngioDynamics, Inc. ANGO recently announced the completion of the sale of its PICC and Midline product portfolios to Spectrum Vascular for $45 million in cash.
AngioDynamics' PICC, Midline, and tip location products are the subject of the transaction. During AngioDynamics' fiscal 2023, the combined portfolio of products contributed more than $43.5 million in revenues annually.
Price Performance
For the past six months, ANGO’s shares have declined 28.1% against the industry’s rise of 7.8%. The S&P 500 increased 13.1% in the same time frame.
Zacks Investment Research
Image Source: Zacks Investment Research
More on the News
AngioDynamics PICC and Midline product portfolio formed part of the medical devices segment of the company and featured products like BioFlo PICC, BioFlo Midline Catheters, MedComp PICC and Medcomp Midline.
In an effort to further simplify its product line, the company also declared that it has stopped supplying its Uniblate and Starburst Radio Frequency devices as well as its Syntrax support catheter goods. A little over $5.5 million in sales were generated by these goods in AngioDynamics fiscal 2023.
This divestment demonstrates the company's emphasis on delivering higher med tech platform penetration in high-growth areas and represents another important juncture in the company's transformation. AngioDynamics expands on the June 2023 announcement of the divestment of its Dialysis and Biosentry businesses.
Spectrum Vascular now has a robust, well-known product line and a talented sales staff thanks to the acquisition of the PICC and Midline portfolios. Expanding patient access to these top-of-the-line, superior medical devices will aid Spectrum Vascular, a developing supplier of vascular access solutions.
Three components make up the transaction consideration —$34.5 million paid at closing, a $5.5 million earnout linked to sales of the divested products over the next two years, and a $5 million milestone payment paid upon the final transfer of the manufacturing of the divested products to a third-party manufacturer.
The company's fiscal 2024 results are likely to be positively impacted by the assets divested and discontinued since they will be treated as discontinued operations. AngioDynamics’ revenues for fiscal 2024 are likely to be lowered by about $50 million due to the disposal of the PICC and Midline businesses as well as the closure of the radiofrequency ablation and Syntrax businesses.
This transaction, along with the discontinuation of our radiofrequency ablation and Syntrax products, reinforces AngioDynamics’ balance sheet, optimizes its product portfolio, and intensifies its strategic focus on achieving growth and profitability within the NanoKnife, Mechanical Thrombectomy, and Auryon businesses.
The company anticipates that the discontinued operations and the PICC and Midline business divestment will increase the gross margin for fiscal 2024.
Industry Prospects
Per a report by MarketsandMarkets,the global MedTech industry market size is estimated to grow from $642.5 billion in 2023 to $668.2 billion by 2024, at a year on year increase of approximately 4%.
The rising frequency of chronic diseases is a primary driver of the med tech market's expansion. Chronic diseases such as diabetes, cardiovascular disease, and obesity are on the rise around the world, and med tech is increasingly being used to assist people to manage and avoid these conditions.
Notable Developments
Recently, AngioDynamics announced the FDA clearance for the Auryon XL Catheter, a 225-cm radial access catheter, for use with the Auryon Atherectomy System in the treatment of Peripheral Arterial Disease.
With this 225-cm catheter length, access points in Atherectomy procedures can be expanded, which can help reduce access site complications and accelerate patient recovery.
AngioDynamics, Inc. Price
AngioDynamics, Inc. Price
AngioDynamics, Inc. price | AngioDynamics, Inc. Quote
Zacks Rank & Stocks to Consider
ANGO carries a Zacks Rank #4 (Sell) at present.
Some better-ranked stocks to consider in the broader medical space are Universal Health Services UHS, Integer Holdings Corporation ITGR and Elevance Health, Inc ELV.
Universal Health Services, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 4.4% for 2024. UHS’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UHS’s shares have gained 1.9% in the past six months against the industry’s 5% decline.
Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 43.5% in the past year against the industry’s 3.7% decline.
Elevance Health, carrying a Zacks Rank of 2, reported fourth-quarter 2023 adjusted earnings per share of $5.62, beating the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%.
Elevance Health has a long-term estimated growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.1%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
