A New Surgical Technique is Fueling Demand
Gene J. is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
A new report by a leading market research firm indicates that a new surgical technique is fueling global demand for “absorbable sutures,” and the study says there are a number of public companies active in this space already.
The study forecasts a strong 6.25 percent growth rate for public and private firms in this niche market, an outgrowth of the “minimally invasive surgery” procedures that are being developed by doctors to keep hospital stays, and overall medical care costs, down.
The vendors mentioned in the report include, but are not limited to, Conmed Corp. (NASDAQ: CNMD), Integra LifeSciences Corp. (NASDAQ: IART), and Medtronic Inc. (NYSE: MDT), as well as the privately held U.S. firm Codman and Shurtleff Inc., and the privately held German firms B. Braun Melsungen AG, and Medicon eG.
The study by Research & Markets is called “Global Surgical Equipment Market 2012-2016,” and a copy of the report is available here.
Analysts said the increasing demand for minimally invasive surgery has caused medical supply companies to switch to offering absorbable sutures, creating a new technology trend in medicine. According to the report, the demand for minimally invasive surgeries worldwide is expected to continue. Minimally invasive surgeries offer many benefits to patients as well as surgeons, such as faster recovery, fewer chances of infection post-surgery, less pain, reduced visible marks, bleeding control, and enhanced accuracy.
I am keen on Conmed, Integra, and Medtronic, even though the report notes that as U.S. firms they will face the new medical device tax as part of the healthcare reform law passed in 2009. Research & Markets calls the U.S. surgical device market “a challenge,” but global growth by these three companies should offset any gloom from the U.S. market.
Recent reasons for my buy recommendations on these stocks:
- Medtronic reported more than $10 billion in revenues for its most recent fiscal year and continued innovations in sutures, as well as the recent renewal of the federal Research & Development tax credit will boost the firm, adding $35 million to the bottom line this year, or 4 cents per share.
- Conmed this week announced that it expects to report fourth quarter 2012 financial results before the market opens on Thursday, Feb. 14, 2013, and we believe the firm will top analyst expectations once again.
- Integra LifeSciences was recently honored for the fourth consecutive year as one of New Jersey's Fifty Fastest Growing Companies by NJBIZ, one of New Jersey's leading statewide business newspapers.
Commenting on the Research & Markets report, an analyst from TechNavio's Healthcare team said: "Most of the vendors are developing advanced devices to increase their market share because of the increased competition.”
GKoprowski has no position in any stocks mentioned. The Motley Fool owns shares of Medtronic. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!