Dive Brief:

• Bloomberg reported late Tuesday that Medtronic made an offer to acquire Intersect ENT, the Menlo Park, California-based medtech focused on treatments for chronic sinusitis. The report described discussions as "early" and said Intersect’s board is currently reviewing the bid.
• Shares in Intersect were up more than 30% Wednesday morning to its highest price since mid-March. The company has suffered from delays to elective procedures and ENT office visits since the pandemic took hold.
• A Medtronic spokesperson declined to comment on the report. Intersect could not be reached for comment on the report prior to time of publication.

Dive Insight:

Intersect notched a win last month with CMS approving its Sinuva implant for transitional pass‐through payment status, to be reimbused under the Hospital Outpatient Prospective Payment System and Ambulatory Surgery Center Payment System. The non-surgical implant is meant for patients with recurrent nasal polyps who have had prior sinus surgery.

It was a positive note in an otherwise tumultuous few months. Intersect's stock tumbled amid market volatility in March. In May, the company reported it had cut its staff by 25% and furloughed an additional 5% of workers, particularly in manufacturing. First quarter revenues came in at $19.8 million, down from $26.7 million the prior year in light of deferred sinus procedures, the company said, with expectations for revenue to "decline markedly" in the second quarter.

At the time, Intersect also said it was suspending production through the fall and that it believed it had enough money to operate through 2022. 

According to a note sent Wednesday from analysts at SVB Leerink, there was a similar M&A headline from StreetAccount this spring. The analysts identified Smith & Nephew, Stryker and Johnson & Johnson as other strategic fits to scoop up Intersect.

Medtronic's ear, nose and throat offerings already include a number of powered instruments for sinus surgery, as well as balloon dilation systems, navigation systems and irrigation systems.

Medtronic CEO Geoff Martha has suggested the company would like to be aggressive with M&A in the unsettled pandemic-era economy.

"I think it is a good time to do M&A," Martha said on a May 21 earnings call, noting that asset prices are down. "We can play offense. And I think our focus remains the same on tuck-ins."

There was also speculation in late February that Medtronic was in early talks to acquire LivaNova.