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Stryker's (SYK) Acquisition of Artelon Set to Expand Its Market

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Stryker Corporation (SYK - Free Report) recently announced that it has entered into a definitive agreement to acquire Artelon, a privately held company specializing in innovative soft tissue fixation products for foot and ankle and sports medicine procedures.

The acquisition will bolster Stryker's product line in the soft tissue fixation market and demonstrate the company's dedication to offering unique ligament and tendon reconstruction options.

Price Performance

For the past six months, SYK shares have rallied 17.4% compared with the industry’s rise of 8.4%. The S&P 500 increased 16% in the same time frame.

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The technologies offered by Artelon enhance and broaden the selection of products that Stryker's sports medicine and foot and ankle specialists currently provide. With more than 60,000 implantations globally, its unique synthetic technique is intended to improve biological and mechanical ligament and tendon repair.

Additionally, through the acquisition, Stryker will be able to more effectively position itself in the sports medicine and foot and ankle markets with cutting-edge biomaterial technology that promotes the recovery of patient's soft tissues.

The acquisition transaction is subject to customary closing conditions. Stryker and Artelon are likely to continue to operate as separate entities and proceed with their business until the transaction closes.

Industry Prospects

Per a report by Mordor Intelligence, the global soft tissue repair market is estimated to be $14.8 billion in 2024 and is anticipated to exceed $18.8 billion by 2029, at a growth rate of 4.9%

The growing incidence of sports-related injuries is one of the major factors driving market growth, as it is expected to increase the adoption of soft tissue repair procedures.

Given the market potential, Stryker’s acquisition of Artelon is likely to boost the company’s business and generate additional revenues.

Notable Developments

In May 2024, Stryker announced the successful completion of the first European surgeries using the Infinity Total Ankle System with Adaptis and Everlast technology. Infinity with Adaptis builds on the legacy of the original Infinity Total Ankle, with a decade of clinical use.

In February, Stryker announced the successful completion of the first shoulder arthroplasty surgeries using Blueprint Mixed Reality (MR) Guidance in Europe. The Blueprint MR Guidance System allows surgeons and their instruments to be guided by 3D images and guidance widgets, which can be displayed on the patient and in the surgeon’s line of sight without disrupting normal workflow.

Zacks Rank & Stocks to Consider

SYK carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the broader medical space that have announced quarterly results are Align Technology, Inc. (ALGN - Free Report) , Ecolab (ECL - Free Report) and Boston Scientific Corporation (BSX - Free Report) .

Align Technology, currently carrying a Zacks Rank of 2 (Buy), reported first-quarter 2024 adjusted earnings per share (EPS) of $2.14, which beat the Zacks Consensus Estimate by 8.1%. Revenues of $997.4 million outpaced the consensus mark by 2.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Align Technology has a long-term estimated growth rate of 6.9%. ALGN’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 5.9%.

Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 1.7%.

Ecolab’s shares have rallied 33.8% against the industry’s 9.3% decline in the past year.

Boston Scientific reported first-quarter 2024 adjusted EPS of 56 cents, which beat the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion surpassed the Zacks Consensus Estimate by 4.9%. It currently carries a Zacks Rank #2.

Boston Scientific has a long-term estimated growth rate of 12.5%. BSX’s earnings surpassed estimates in the trailing four quarters, the average surprise being 7.5%.

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