Tela Bio’s OviTex ‘primary beneficiary’ of BD settlement, says Lake Street

After Becton Dickinson (BDX), or BD, announced it has reached an agreement to resolve the vast majority of its existing hernia litigation and confirmed the settlement amount is within the current product litigation reserve of $1.9B and will be paid out over a multi-year period, Lake Street analyst Frank Takkinen thinks this will drive a significant shift in physician and patient preference away from synthetics to “natural repair” solutions, such as Tela Bio’s (TELA) OviTex. The firm thinks the transition will present a “jump-ball” opportunity, allowing for Tela to take share from BD, adding that it thinks this will be especially apparent with OviTex IHR, purpose built for the inguinal space, where most synthetics are used today. The firm reiterates a Buy rating and $8 price target on Tela shares.