The last week of August proved to be a relatively significant one for multiple med-tech companies. Although the Labor Day holiday is likely to keep a lid on the news flow in the first week of September, there are a few upcoming earnings reports. What's more, the timing of restructurings, acquisitions and the like are inherently unpredictable and I would not be surprised to hear more news along these lines.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Helicos Looks Like It's Out of Moves
Few readers are going to be familiar with Helicos BioSciences (OTC:HLCS), as this tiny life sciences company has failed to successfully commercialize its direct DNA and RNA molecule sequencing technology. Although the technology is legitimately interesting, the company's execution mistakes left it with basically a long-shot survival strategy - suing other, larger, life science companies like Pacific Biosciences (Nasdaq:PACB), Life Technologies (Nasdaq:LIFE) and Illumina (Nasdaq:ILMN) for patent infringement.

Unfortunately for Helicos shareholders, the company may well have just lost the last hand in the game. The company dropped its litigation with Life Tech and settled with PacBio in May, but there has been nothing in Helicos' SEC filings to suggest that the settlement was financially meaningful. Worse still, the company saw a judge render a summary judgment invalidating the remaining patent in question against Illumina. At this point, the best remaining hope for Helicos is that a larger life sciences company is willing to pay something for its IP and technology, but investors should not expect to see any significant benefit from such an outcome.

SEE: Investing In The Healthcare Sector

Two More Companies Hope to Find Better Margins Through Restructuring
Two out of the three players in the North American cardiac rhythm management market (that is pacemakers and ICDs) have apparently launched restructurings. The news that Boston Scientific (NYSE:BSX) is doing so again scarcely qualifies as news, as this company has been in seemingly perpetual restructuring/turnaround for years. Nevertheless, the company will apparently still cut more jobs and separate its two main cardiovascular businesses (after combining them a while back).

The news of a restructuring at St. Jude Medical (NYSE:STJ) is a little more surprising, as this company has been doing relatively better despite a weak CRM market. St. Jude will reportedly be firing 300 people and reorganizing its business into two operating units focused on implantable electronic devices and cardiovascular/ablation technology.

SEE: Cashing In On Corporate Restructuring

AstraZeneca Makes a Good Hire
(NYSE:AZN) has been a struggling Big Pharma for some time now, as patent expirations and pipeline failures have left the company's revenue situation in poor shape. In recent months the company has been an active acquirer and partner - tying up with Amgen (Nasdaq:AMGN), buying Ardea and sharing in Bristol-Myers' (NYSE:BMY) purchase of Amylin.

Now the company has a new leader as well. AstraZeneca has tapped Pascal Soriot as the new CEO. Soriot is the former CEO of Genentech and has served as Roche's (OTC:RHHBY) Chief Operating Officer of the pharmaceutical division since the acquisition of Genentech. This is an excellent hire for AstraZeneca, given Soriot's demonstrated ability in overseeing successful pipeline development and product launches for many years now. While this is a loss for Roche, it's not altogether unexpected and the company has a deep bench of managerial talent.

SEE: 6 Great Companies With Top-Notch Healthcare Benefits

The Bottom Line
Although this has been a solid year for med-tech, some sub-sectors are starting to lag a bit during this late summer rally. For what it's worth, it's not uncommon for healthcare stocks to "drift" in the late summer. The Health Care Select Sector SPDR (ARCA:XLV) is up about 12% year-to-date, below the the 12.8% return of the S&P 500. The iShares Dow Jones US Pharmaceuticals ETF (ARCA:IHE) is up about 14%, while the iShares Dow Jones US Medical Devices ETF (ARCA:IHI) is up almost 12%. The SPDR Biotech ETF (ARCA:XBI) continues its tear, having risen almost 35% year-to-date.

At the time of writing, Stephen D. Simpson owned shares of Roche, and has since 2011.

Related Articles
  1. Investing

    Time to Bring Active Back into a Portfolio?

    While stocks have rallied since the economic recovery in 2009, many active portfolio managers have struggled to deliver investor returns in excess.
  2. Economics

    Investing Opportunities as Central Banks Diverge

    After the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
  3. Chart Advisor

    Now Could Be The Time To Buy IPOs

    There has been lots of hype around the IPO market lately. We'll take a look at whether now is the time to buy.
  4. Stock Analysis

    The Biggest Risks of Investing in Pfizer Stock

    Learn the biggest potential risks that may affect the price of Pfizer's stock, complete with a fundamental analysis and review of other external factors.
  5. Stock Analysis

    Allstate: How Being Boring Earns it Billions (ALL)

    A summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
  6. Chart Advisor

    Copper Continues Its Descent

    Copper prices have been under pressure lately and based on these charts it doesn't seem that it will reverse any time soon.
  7. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  8. Markets

    PEG Ratio Nails Down Value Stocks

    Learn how this simple calculation can help you determine a stock's earnings potential.
  9. Mutual Funds & ETFs

    Buying Vanguard Mutual Funds Vs. ETFs

    Learn about the differences between Vanguard's mutual fund and ETF products, and discover which may be more appropriate for investors.
  10. Mutual Funds & ETFs

    ETFs Vs. Mutual Funds: Choosing For Your Retirement

    Learn about the difference between using mutual funds versus ETFs for retirement, including which investment strategies and goals are best served by each.
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>

You May Also Like

Trading Center