Masimo Corporation (MASI), a leader in non-invasive monitoring technology, recently revealed that the East Tennessee Children???s Hospital has installed Masimo Patient SafetyNet.
This installation represents East Tennessee Children???s move to standardize with Masimo SET Measure-Through-Motion and Low Perfusion pulse oximetry and rainbow Pulse CO-Oximetry.????
Masimo is a market leader in the pulse oximetry monitoring equipment industry. The company???s prospects are encouraging, given the sizeable global market opportunity, adoption of pulse oximetry in non-critical areas of the hospital and growing barriers to entry due to additional non-invasive parameters.
While Masimo???s patented SET offering remains its mainstay, the rainbow measurements represent another growth driver in hospital care. However, the company???s reliance on third-party providers like OEMs for a part of its business and customer concentration raises concern. Additionally, we remain concerned about Masimo???s reliance on group purchasing organizations for the sale of its pulse oximetry products to hospitals in the domestic market.
Shipments have been growing at a steady rate fueled by new contracts. However, the renewal of the royalty agreement with Covidien (COV) provides little or no benefit due to lower rates.
We also note Covidien???s effort to expand its oximetry and monitoring products portfolio. In late 2012, the company won U.S. Food and Drug Administration (:FDA) 510(k) approval as well as European Economic Area (EEA) CE Mark clearance for its Nellcor Bedside Respiratory Patient Monitoring system.
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