Smith & Nephew plc
) recently unveiled a strategic partnership between its Advanced
Wound Management (AWM) franchise and United Drug Medical. This
new partnership, effective Jun 1, 2013, will promote Smith &
Nephew's IV3000 range of cannula dressings in the UK.
As per the partnership, United Drug Medical will be liable for
sales, customer service and distribution of IV3000 in the UK. We
believe that the partnership will strengthen Smith & Nephew's
sales and distribution network for the post operative dressing
IV3000 brand in the country.
Additionally, IV3000 clientele will gain access to higher level
of support and resources. The company will stress on in-use
training and education for the product line. Besides, Smith &
Nephew plans to unveil product development initiatives in the
near-term on the back of the strategic partnership. This new deal
extends the long-standing association between the companies.
We are encouraged by Smith & Nephew's consistent focus on AWM
franchise. Based on the company's efforts, the AWM business
growth surpassed the market growth rate in the in the most recent
quarter. AWM franchise rose 12% against market growth of 2% in
the first quarter of 2013.
Further, advanced wound care (includes the IV3000 range) under
the AWM business grew at par with the market growth rate. The
upside was led by solid results from the emerging and
Even in 2012, IV300 range posted solid performance as it gained
traction in emerging and international market on the back of
product training and education. Thus, the partnership with United
Drug Medical should yield positive outcomes in the upcoming
Although Smith & Nephew's increasing focus on the AWM
franchise is paying off, the sustained weakness in the orthopedic
reconstruction business is a cause of concern. Nonetheless, we
are encouraged to note the gradual stability in the U.S. market,
though the challenging scenario in Europe continues to be an
Currently, the stock carries a Zacks Rank #3 (Hold). While we
remain on the sidelines for Smith & Nephew, we are more
positive about other medical stocks such as
Myriad Genetics Inc.
Natus Medical Inc
). These stocks carry a Zacks Rank #1 (Strong Buy).
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