According to a report from the Wall Street Journal, Johnson & Johnson (JNJ) is in talks to acquire Shockwave Medical (SWAV). Shockwave is a medical device manufacturer specializing in the manufacture of cardiovascular products. It could be a big deal for Johnson & Johnson, given the company’s nearly $12 billion market capitalization, but the report says talks could fall apart.

Yahoo Finance’s Anjalee Khemlani explains the report in the video above.

For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.

Editor’s note: This article was written by Stephanie Mikulich.

video transcript

Josh Lipton: Mergers in the healthcare sector and Johnson & Johnson are making news there.

Anjali Khemrani: Yes, it is. According to the Wall Street Journal, Johnson & Johnson is reportedly considering shockwave medicine. This is a company that has grown rapidly over the past few years.

They have launched a new field that focuses on actual heart disease and related treatments accordingly. So whether it’s directly to the heart or pain in the legs, it could indicate a heart disease problem. That is the role of their medical equipment.

This is Area Heart. In general, this is an area of ​​focus for Johnson & Johnson. However, when looking at the earnings report, it’s important to note that the company’s medical devices business has been somewhat stagnant over the past decade alone.

You’ve probably seen annual revenues reach $25 billion to $30 billion. So this could be a real boost for the company. Shockwave has really taken off over the past few years.

Revenue was $730 million. And the market valuation is about 11 billion. Therefore, it could represent an interesting market opportunity.

The company says it sees a market opportunity of 14.5 billion units for its devices. It will be really interesting if that happens. It’s important to note that Boston Scientific was reportedly interested in it. That was just a while ago. It will be very interesting to see if Johnson & Johnson actually adopts it.

AKIKO FUJITA: Yeah, the stock is up significantly today, up nearly 12% there. Thank you so much, Anjali.