On June 27,
), manufacturer of microsurgical devices for ophthalmic and
neurological applications, announced the 510(k) clearance of its
VersaVIT by the U.S. Food and Drug Administration (FDA). VersaVIT
is a novel vitrectomy system for the retinal surgery market.
Management believes that the company will gain a keystone in its
strategy to enter the high growth sphere of the retinal surgery
market by launching this VersaVIT system. Factors in favor of
VersaVIT highlight that it is highly functional, portable and is
priced competitively relative to other traditional vitrectomy
systems available in the market.
The VersaVIT system will enhance the product portfolio of
Ophthalmology category -- a Synergetics mainstay. The company
already offers about 1,000 retinal surgical items, ranging from
handheld disposables to surgical devices. However, the company
continues to develop its technology and update its products to meet
the dynamic demands of the market it serves.
The company reported a 40% decline in profit in the third
quarter of fiscal 2012 as operating expenses and costs of sales
edged up. Performance of the Ophthalmology category was also
lackluster as revenue dropped 8.8% year over year to $8.4
Barring Germany, the company's sales declined in Europe in the
most recent quarter. It expects to rebound in the European market
after the CE mark approval and subsequent commercialization of
Synergetics remains optimistic about fiscal 2013 sales and
earnings as it expects VersaVIT systems to boost its sales. As the
company prepares to capitalize on its new products such as
VersaPACK and VersaVIT, tough competition from peers, including
), remains an overhang. The stock currently retains a Zacks #4
Rank, which translates into a short-term Sell rating.
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