), a leader in non-invasive patient monitoring know how, recently
revealed that it had inked a deal with Premier, a group
purchasing organization, for its SedLine brain function
monitoring device. Following a competitive bidding process,
Premier will make available SedLine to its participants.
COVIDIEN PLC (COV): Free Stock Analysis
MASIMO CORP (MASI): Free Stock Analysis
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In effect till July 31, 2015, Premier participants may buy Masimo
Sedline brain function monitoring system through the company's
clinical education force and direct sales team.
SedLine know how facilitates better care of anesthetized
patients. It monitors brain functioning and provides timely
information about the patient's reaction to anesthesia in both
the intensive care unit and operating room.
Masimo is a market leader in the pulse oximetry monitoring
equipment industry. The company's prospects are encouraging,
given the sizeable global market opportunity, adoption of pulse
oximetry in non-critical areas of the hospital and growing
barriers to entry due to additional non-invasive parameters.
While Masimo's patented SET offering remains its mainstay, the
rainbow measurements represent another growth driver in hospital
care. However, the company's reliance on third-party providers
like OEMs for a part of its business and customer concentration
raises concern. Additionally, we remain concerned about Masimo's
reliance on group purchasing organizations for the sale of its
pulse oximetry products to hospitals in the domestic market.
Shipments have been growing at a steady rate fueled by new
contracts. However, the renewal of the royalty agreement with
) provides little or no benefit due to lower rates.
We also note Covidien's effort to expand its oximetry and
monitoring products portfolio. Earlier this month, the company
won U.S. Food and Drug Administration (FDA) 510(k) approval as
well as European Economic Area (EEA) CE Mark clearance for its
Nellcor Bedside Respiratory Patient Monitoring system.
We currently have a long-term 'Neutral' recommendation on Masimo.
The stock carries a Zacks #3 Rank, which translates into a
short-term Hold rating.