Leading industrial gas supplier
) recently penned a long-term respiratory gas supply contract with
Vapotherm, Inc, a primary respiratory care device producer for
domestics and hospitals in Stevensville, Maryland.
Under the pact, Praxair and Vapotherm will be jointly engaged in
the promotion and supply of the recently introduced heliox system,
approved by the U.S. Food and Drug Administration, to the hospitals
of North America, Latin America, Spain and Portugal. The heliox
system is a high-flow therapy tool which was launched by Vapotherm
for uninterrupted supply of helium and oxygen gases through nasal
The Heliox device system will be delivered to the hospitals
along with Praxair's heliox gas and a new proprietary gas cart
arrangement to ensure security and flexibility of product supply.
Additionally, the new system will help the patients take on new
non-invasive respiratory option for better recovery.
Furthermore, through the joint venture Praxair is likely to
strengthen its client base in the healthcare industry. There is a
huge opportunity for the company to grow in future due to the
increased demand for the industrial gases in several sectors.
Praxair is estimating that the annual organic sales growth will be
8%-12% by 2015.
Even though, Praxair globally established itself in the diverse
markets, it should be aware of the tough competition from its
Kronos Worldwide Inc.
), who are exhibiting striking results.
The current Zacks Consensus Estimates for Praxair is $1.45
and $5.85 for the second quarter of 2012 and for fiscal 2012,
respectively. The company currently retains a Zacks #3 Rank, which
translates into a short-term 'Hold' rating. We maintain a Neutral
recommendation on the stock.
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