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Medtronic Is Said to Bid for Sinusitis Device Firm Intersect

Medtronic reportedly has offered to buy Intersect ENT, make of drug-delivery devices used by ear, nose and throat doctors to treat sinusitis.
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Medical equipment giant Medtronic  (MDT)  reportedly has offered to buy Intersect ENT  (XENT) , which makes drug-delivery devices used by ear, nose and throat doctors to treat sinusitis.

Intersect’s board is considering the bid, knowledgeable sources told Bloomberg.

Shares of Intersect ENT, Menlo Park, Calif., jumped on the news. They recently were at $17.84, up 28%. But the shares are still off 27% this year.

Medtronic, Dublin, recently traded at $91.39, down 0.31%. The shares have slid 20% year to date.

Medical-equipment companies have suffered from the halt of elective surgeries during the coronavirus pandemic. Intersect has laid off 25% of its workers and furloughed another 5%.

Medtronic’s biggest business is heart-related equipment, such as defibrillators and pacemakers. 

Morningstar analyst Debbie Wang sees a bright future for Medtronic.

“Despite the pandemic-driven disruption to normal business, we’ve seen little to suggest that Medtronic’s wide moat - based on intangible assets - is at risk,” she wrote in a May report.

“We expect the relationships with hospital clients that Medtronic has worked to enhance over the past five years ... should benefit the firm as providers seek to resume caring for non-covid-19 patients and performing the more profitable cardiovascular, neurovascular, and orthopedic procedures that can help stabilize finances at hospitals.”

Those enhancements have come "through Medtronic's arrangements to manage cath[aterization] labs and electrophysiology outpatient centers, as well as its progress in signing up hospitals for its various risk-based contracts," Wang said.