Top 2% Stock Shockwave Rockets As Boston Sci Reportedly Mulls Takeover
The company has a promising cardiovascular pipeline with several products in development.
According to a report published on Friday, (BSX), is considering a merger with Shockwave Medical.
Electrical impulses are used to "crack", or "crack up", hardened calcium deposits in the arteries. Intravascular lithotripsy is becoming a popular alternative to atherectomy, the traditional method. The calcifications are removed using a small drill.
Bloomberg reported that people with knowledge of the deal said it could boost Boston Scientific's portfolio in cardiovascular medicine. Boston Scientific, among other products sells pacemakers as well as devices that repair damaged parts of the heart.
Investor's Business Daily declined to comment on the companies.
SWAV shares jumped 9.7% in midday trading today on the stock exchange, near 285. Boston Scientific shares fell 1.2% to 52.
SWAV Stock: Dealing Timing is Key
Deals in the medical sector are heating up. Merck (MRK), pledged to pay $10.8 billion for Prometheus Bio RXDX (RXDX) in the early part of this week. GSK (GSK), shortly after, announced that it would purchase Bellus Health (BLU), for $2 billion.
These deals follow the announcements of Amgen's merger with Horizon Therapeutics and Pfizer's (PFE) merger with Seagen.
The rumored Shockwave deal follows also a proposed rule from the Centers for Medicare & Medicaid Services, which could help increase use of intravascular-lithotripsy. The rule proposes to add three new codes that are higher paying for the technology provided by Shockwave. SWAV's stock soared by almost 11% the day after the Medicare reimbursement news was released.
Boston Scientific's Cardiovascular Division is its largest money-making division. The cardiovascular division generated sales of $7.8 billion last year. This was a growth rate of more than 1% organically. This accounted for over 61% of total company sales.
High Rated Medical Stock
SWAV stock has a high rating, according to IBD Digital. The Composite Rating for the shares is 98, which is a very high rating. Shockwave is in the top 2% in terms of technical and fundamental measures.
Shockwave also has an a of 94 which places it in the top 6 percent of all stocks for performance over a 12-month period.