Massport Deploys ZOLL’s AED Plus (MDT) (PHG) (ZOLL)

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Resuscitation devices maker ZOLL Medical (ZOLL) reported that Massachusetts Port Authority (“Massport”) has deployed its AED Plus devices across its three airports (Boston Logan International, Hanscom Field and Worcester Regional) as well as maritime facilities located in the Port of Boston. The Massachusetts-based company has won the contract to install 145 units of such devices.

AED Plus treats sudden cardiac arrest (“SCA”), an abrupt loss of cardiac function. SCA is one of the major causes of unexpected deaths claiming over 325,000 lives annually in the U.S. Early defibrillation raises the chances of survival from just 5% to more than 50%.

The installation represents a part of safety measures to provide increased access of automated external defibrillators (AEDs) to travelers and Massport employees at the onset of SCA. The availability of AEDs within the first few minutes of the occurrence of SCA improves survival rates.

The AED Plus devices provides the “Real CPR Help”, a feedback technology which helps rescuers deliver cardiopulmonary resuscitation (“CPR”) with real-time visual and audio feedback, guiding them to achieve the proper depth and rate of chest compressions.

Real CPR Help technology enables the rescuers to know when chest compressions reach the recommended depth. The AED Plus devices are fully compliant with the new American Heart Association (“AHA”) and European Resuscitation Council (“ERC”) guidelines issued in October 2010.

ZOLL Medical is a leading player in the global market for external defibrillators, which is worth more than $1 billion. The company is the innovator of a wide range of product features that have become the standard of care in the external defibrillator industry.

We believe that ZOLL Medical’s wide product range coupled with its expansion initiatives should push growth moving forward. Similar to its flagship LifeVest wearable defibrillator, the company’s temperature management business emerging as a meaningful contributor to its sales and margins.

However, ZOLL Medical operates in a highly competitive U.S. defibrillation market. It competes with Physio-Control, a wholly-owned unit of Medtronic (MDT) and Philips (PHG). Moreover, the North American emergency medical services (“EMS”) market remains sluggish due to tight budgets for equipment purchases. We currently have a Neutral recommendation on ZOLL Medical.

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