Abbott Labs (NYSE:ABT) has never been shy about using M&A to build its business, and it was generally assumed that more deals would follow in the wake of the company's split with AbbVie (Nasdaq:ABBV). While Monday is often the preferred day to announce deals, Abbott went above and beyond this week with two acquisition announcements – both of which could be highly promising down the line.
A Better Mousetrap For The Legs?
Peripheral vascular treatment is still a high-growth market, as clinicians have an increasing array of effective tools at hand to treat blockages in the arteries of the legs – blockages that can lead to falls and amputations if not treated. Major coronary stent players like Abbott, Medtronic (NYSE:MDT), and Boston Scientific (NYSE:BSX) also develop stents for the peripheral vasculature (where they also compete with the likes of Covidien (NYSE:COV), Bard (NYSE:BCR), Johnson & Johnson (NYSE:JNJ), and Cook), but stents have long been problematic in these narrower, twisting vessels, and stents have to compete with various arthrectomy devices sold by companies including Covidien, Cardiovascular Systems (Nasdaq:CSII), and Spectranetics (Nasdaq:SPNC).
Abbott is bulking up its business here with the acquisition of IDev Technologies for $310 million. IDev has developed its SUPERA Veritas peripheral stent system, and it looks quite promising. These stents use a proprietary interwoven wire technology that attempts to mimic a more natural motion. 
So far, it looks like there's something to this technology. While peripheral stents have historically had fracture rates approaching 50% and high incidiences of restenosis (though more modern versions are much, much better), studies of the VERITAS have shown solid long-term patency and as little as zero fractures, even in what should otherwise be very difficult cases. If the data hold up, this could be a compelling peripheral platform for Abbott in a relatively short amount of time, but the stent is not yet approved for the U.S.
SEE: A Checklist For Successful Medical Technology Investment

A New Approach To A Common Procedure
Abbott has also announced the acquisition of OptiMedica, a privately-held med-tech company that has developed the Catalys Precision Laser System for cataract surgery. The Catalys uses a combination of a laser, optical coherence tomography, and pattern scanning technology to replace many of the manual steps in a cataract surgery procedure. While cataract surgery has become relatively routine, complications do tend to be associated with the various manual steps of the process, and this system could offer improvements in throughput and patient outcomes. Better still, it fills that sweet-spot in tech of “new ways of doing old things”.
Abbott will be paying $350 million upfront, with milestones worth as much as $150 million tied to sales. This acquisition should fit in well with Abbott's existing eye care business, and with the recent Valeant (NYSE:VRX) acquisition of Bausch & Lomb, this could be a good opportunity to gain share in the cataract surgery market. 
Two In, One Out
Although not packaged in with Monday's deal announcements, word has also come out that the company has ended its partnership with Stratec Biomedical. There was never all that much information on this partnership, other than that they were collaborating on some sort of automated analyzer systems for the diagnostics market. With Stratec attributing the decision to a change in Abbott's priorities, I wonder if this will lead to speculation that Abbott is deprioritizing the diagnostics business (though I'd think that's a bit of a leap at this point...).
The Bottom Line
With Abbott reporting later this week, I'll be back with a more complete discussion of valuation and Abbott's investment prospects at that time. For now, though, I would say that both of these acquisitions look like good uses of capital and both deals represent potentially transformative technologies in large and meaningful markets where Abbott already has a presence – a detail which should increase the odds of success down the line.

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