Provider of specialty medical devices, Teleflex Inc (TFX), recently entered into a strategic partnership with Premier, Inc., a healthcare solutions organization, for the former’s ARROW Dialysis Access portfolio.
The three-year agreement is aimed at popularizing and enhancing the dialysis portfolio of Teleflex. The new multi-supplier agreement will not only allow hospitals to access the current dialysis portfolio, but will also entitle them to the right to access future dialysis product releases, such as the ARROW-Clark VectorFlow Chronic Hemodialysis Catheter.
Individuals who hold membership with Premier will be able to receive special pricing offers for the ARROW Polysite Low-Profile Hybrid Port product line. We believe that this will boost Teleflex’s customer base going forward.
Teleflex is performing well with the Arrow EZ-IO Vascular Access System. In March this year, Teleflex received FDA clearance for another restated Indication for use of the EZ-IO Vascular Access System and the company reported impressive growth with over 3 million needles sold globally in early Sep 2014.
Teleflex is also planning to expand its catheter production facilities in Hradec Králové, the Czech Republic. The company intends to invest about $1 million in order to expand the existing plant. We believe that expansion into the low cost region will drive profitability going forward.
Teleflex recently reported an impressive quarter, in which it managed to outshine the Zacks Consensus Estimate for both earnings and revenues. Teleflex’s revenues continue to be largely driven by synergies from the acquisition of Vidacare Corp. completed in Dec 2013.
Higher sales volumes of existing products, new product launches as well as price increases also support the revenue expansion. Management also raised its fiscal 2014 guidance, reflecting expectations of a better performance, going forward.
In spite of all the positive developments, Teleflex remains vulnerable to adverse currency volatility. Moreover, stiff competition from the likes of CareFusion (CFN), Covidien plc (COV), and CR Bard (BCR) remains a headwind for Teleflex.
Teleflex currently carries a Zacks Rank #3 (Hold).
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