The healthcare space is abuzz with new developments and is incredibly attractive from the point of investors. While there is a plethora of companies in the industry, Medtronic PLC (NYSE:MDT) is one player that has secured a special place in every investor’s list. The medical supplies and devices company has even gained the attention of Credit Suisse analysts, who have placed a price target of $85 on the $111.4 billion worth market Cap Company.
Covidien acquisition: Positive
One of the contributing factors to Medtronic PLC (NYSE:MDT)’s fame is its recent acquisition of Covidien plc (NYSE:COV). The deal reached its conclusion in January 2015 as Medtronic paid $49.9 billion for it. As per the agreement, both Medtronic and Covidien have agreed to becomed fully-owned subsidiaries of Medtronic, which is the new combined holding entity.
The deal will help Medtronic PLC (NYSE:MDT) to position itself strongly in the United States and Europe. Following the completion of the acquisition, Medtronic’s chairman and CEO, Omar Ishrak said that the union of the two companies marks a significant milestone in the healthcare industry. He said that the new holding entity is positioned to reach out to a broader population of patients across the world with the objective to solve health challenges.
Federal Court dismissal: Negative
With all the good things happening, Medtronic PLC (NYSE:MDT) did feel the legal pinch too. A decision announced by a Federal Appeals court dismissed $102 million infringement award to be paid to Medtronic. The court rejected the award on grounds that Medtronic is not allowed to recover damages for either lost profits or sale of the products.
In 2011, a jury had awarded damages to the company under a lawsuit pertaining to spiral implants against NuVasive, Inc. (NASDAQ:NUVA). It was alleged that NuVasive’s MaXcess II and III, Helix mini anterior cervical plates and CoRoent XL implants had unauthorisedly used Medtronic patents. Though the latest decision came as a setback to the company, but it has not yet commented on the status. The shares of Medtronic ended 0.42 points up during the last trading session at $76.90.
Medtronic PLC (NYSE:MDT) is currently trading at $75.95 after losing 1.24%.