FDA approval for Nellcor Pulse Oximetry Motion Claims
In May 2013, Covidien plc (NYSE:COV) received approval from the FDA for Nellcor Pulse Oximetry Motion Claims. It is the first company to receive approval from the FDA for a motion-tolerance bedside pulse oximeter. The devices are used to measure arterial oxygen saturation which gives an early warning of hazardous respiratory complications. This enables clinicians to detect and deal with critical conditions of patients sooner. To provide an accurate reading, these devices completely depend on cardiac-based signals. The motion-tolerant pulse oximeter prevents readings that can be inaccurate due to patient movements and provides comfort and safety to the patients. The company has an opportunity to expand its devices segment as the global pulse oximetry market is expected to grow at a CAGR of 5.55% over the period of 2011-2015. With this approval, revenue from its medical devices segment is expected to increase from $8.11 billion in 2012 to $8.4 billion by the end of this year.
Also, Covidien plc (NYSE:COV)’s Nellcor Pulse Oximeters got an approval from the FDA to be used in screening of Critical Congenital Heart Disease, or CCHD. In the U.S. nearly 7,200 infants are born every year with CCHD disease and account for 30% deaths caused by CCHD. Every year nearly 1 in 3 infants with CCHD in the U.S are discharged without diagnosis and 100 to 200 fall victim to the disease. The Nellcor pulse oximeter provides quick facilities that can be used for noninvasive screening, a technique that does not need any insertion into the skin. The device is approved for CCHD screening used by physicians for accurate screening. The introduction of Nellcor in CCHD screening will help physicians to diagnose newborns easily and save more lives. With the approval and adoption of this device, U.S. sales are expected to increase from $929 million in the first quarter to $960 million by the fourth quarter of this year.
Conclusion
The introduction of its new nano pen needle and the use of PCR kit in the BD MAX system will boost Becton, Dickinson and Co. (NYSE:BDX)’s medical segment and diagnostics segment revenue.
Baxter International Inc. (NYSE:BAX)’s Rixubis will control excessive bleeding episodes and Hemophilia B which will eventually boost rFIX sales in the U.S. Additionally, the acquisition of Gambro will help the company to expand its dialysis market and generate high revenue.
Covidien plc (NYSE:COV)’s Nellcor pulse oximeter device will boost its medical device segment’s revenue. There will be increase in the adoption by physicians for Nellcor in CCHD screening, which will lead to increase in the U.S. sales.
Therefore, I recommend a buy for all three stocks.
The article 3 Medical Instrument and Supply Companies You Don’t Want to Miss originally appeared on Fool.com and is written by Shweta Dubey.
Shweta Dubey has no position in any stocks mentioned. The Motley Fool recommends Becton, Dickinson and Co. (NYSE:BDX) and Covidien. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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