Susquehanna Maintains a 'Positive' on Merit Medical Systems (MMSI); Raises Price Target
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Susquehanna maintains a 'Positive' rating on Merit Medical Systems (Nasdaq: MMSI). Price Target $18.
Susquehanna analyst says, "We are maintaining our Positive rating on Merit Medical following yesterday's announcement that the company has acquired the product rights and the related I.P. (11 years until patent expiration) to the EN Snare foreign body removal device from Hatch Medical, LLC. Merit will pay total consideration of $21 mln ($14 mln up-front using cash on hand, a $2 mln drawdown of the company's $30 mln credit facility, and an additional $7 mln post MMSI's launch of the product in 2010). The product is currently manufactured and distributed by a third-party, but Merit expects to take over early in 2010. In the meantime, management expects the royalties the company will receive from EN Snare will offset the incremental amortization and interest expense in 2009, and then with a very conservative expectation of flat sales in 2010, this deal should be $0.06-$0.08 accretive."
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Merit Medical Systems, Inc produces single-use medical products.
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