Sector Watch: Medical equipment stocks
Paging doctor profits: with medical equipment stocks up about 6.3% year-to-date versus a 10.9% decline for the S&P 1500, manufacturers Somanetics Corporation (Nasdaq:SMTS) and CryoLife, Inc. (NYSE:CRY) both have unusually clean bills of health in today’s market.
Somanetics Corporation manufactures and markets the INVOS System, a non-invasive monitoring device that measures the patient’s blood oxygen levels in the brain and muscles. Blood oxygen must be carefully controlled during surgeries since brain damage occurs quickly without sufficient oxygen. The INVOS device consists of a portable monitor and single-use disposable sensors. Somanetics has an installed base of over 2,000 monitors and sold more than 371,000 disposable sensors last year. The company markets its system through a direct sales force in the United States and independent distributors in Europe, Canada, the Middle East and South Africa
Surgeons and anesthesiologists use the INVOS System to take corrective action when oxygen imbalances are detected, thus improving patient outcomes and reducing care costs. Hospitals have a strong incentive to manage care costs since much of their reimbursement is based on fixed fees. By using the INVOS System to monitor patients during surgeries, hospitals can avoid unnecessary complications and lengthened hospital stays.
The INVOS System is already being used in adult and pediatric cardiac surgeries. Somanetics has also developed and begun marketing a smaller disposable sensor for use in neonatal applications. The neonatal device has already been installed in 33 U.S. hospitals and is attracting considerable attention; some 200 neonatal . . .
Somanetics Corporation manufactures and markets the INVOS System, a non-invasive monitoring device that measures the patient’s blood oxygen levels in the brain and muscles. Blood oxygen must be carefully controlled during surgeries since brain damage occurs quickly without sufficient oxygen. The INVOS device consists of a portable monitor and single-use disposable sensors. Somanetics has an installed base of over 2,000 monitors and sold more than 371,000 disposable sensors last year. The company markets its system through a direct sales force in the United States and independent distributors in Europe, Canada, the Middle East and South Africa
Surgeons and anesthesiologists use the INVOS System to take corrective action when oxygen imbalances are detected, thus improving patient outcomes and reducing care costs. Hospitals have a strong incentive to manage care costs since much of their reimbursement is based on fixed fees. By using the INVOS System to monitor patients during surgeries, hospitals can avoid unnecessary complications and lengthened hospital stays.
The INVOS System is already being used in adult and pediatric cardiac surgeries. Somanetics has also developed and begun marketing a smaller disposable sensor for use in neonatal applications. The neonatal device has already been installed in 33 U.S. hospitals and is attracting considerable attention; some 200 neonatal . . .
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