), a leader in non-invasive patient monitoring technology,
recently announced the limited market release of its Universal
ReSposable Pulse Oximetry Sensor System. The ReSposable sensor
offers measure-through motion and low perfusion performance and
accuracy of Masimo's patented Signal Extraction Technology (SET).
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The commercialization of the ReSposable sensor will enable the
company to achieve environmental goals. Masimo's ReSposable
sensor is a cost-effective solution for hospitals to deliver
quality care. Hospitals, under pressure to curtail costs, are
expected to opt for the company's newest sensor.
According to Masimo, the size of the pulse oximetry market was
over $1 billion in 2011 with the sensors contributing the lion's
share to the market. Thus, the ReSposable sensor represents
sizeable commercial opportunity.
The market adoption of the ReSposable sensor will increase
Masimo's installed base leading to higher recurring revenue in
the years ahead. The company's installed base for its pulse
oximeters and original equipment manufacturer (OEM) monitors with
SET is currently over a million units.
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 beyond
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
We also note
) 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