AngioDynamics Inc. (ANGO) recently won an expanded indication clearance from the FDA for its Celerity tip location system. Per the latest approval, clinicians can do away with the follow-up X-ray when the Celerity system is used to assist in the positioning of Peripherally Inserted Central Catheters (PICCs) in adult patients.
The Celerity tip location system uses Electrocardiography or ECG instead of chest X-ray and fluoroscopy to confirm the location of a PICC. By utilizing the patient’s cardiac electrical activity, the device offers superior accuracy in providing the tip location.
The system had received 510(k) clearance from the regulatory authority in Jun 2014, following which the company began U.S. distribution of the same in July.
Notably, the Celerity system when combined with the company’s BioFlo technology provides unique clinical and economic advantages. The combined offering helps generate significant cost savings, which in turn is boosting demand from the company’s clients and hospitals.
Now with the approval of the no chest X-ray claim for the Celerity system, the company expects additional market opportunities for its PICC products. AngioDynamics believes that there will be accelerated demand for its Celerity System from most of the large institutions which have converted to bedside PICC placement.
Interestingly, we note that the company’s innovative portfolio which comprises the BioFlo platform and the Celerity system has successfully made a turnaround in the company’s Vascular Access business, which has been facing considerable weakness over the last two years.
In the recently reported second-quarter fiscal 2015 results (ended Nov 30, 2014), AngioDynamics witnessed 9.4% growth in Vascular Access revenues, highlighting substantial improvement from negative growth witnessed last year. Notably, the share of BioFlo products in the ports and dialysis market also increased in the quarter.
In a separate development, AngioDynamics signed an agreement with the HealthTrust in Dec 2014, covering its PICC products. Under the terms of the agreement, AngioDynamics' entire PICC portfolio, including its BioFlo PICC product line and Celerity tip location system, became available to HealthTrust members effective Jan 1, 2015. By opening up its PICC platform to over 1,400 hospitals, we believe that AngioDynamics can generate significant growth over the 3-year term of the agreement.
Although a sluggish capital spending environment and intensifying competition are concerns, we believe that the combined offering of the Celerity tip location system and the BioFlo technology is poised to strengthen AngioDynamics’ Vascular Access business over the long term.
Currently, AngioDynamics carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical instruments industry include Inogen (INGN), Synergetics USA (SURG) and Abiomed (ABMD). While both Inogen and Synergetics USA sport a Zacks Rank #1 (Strong Buy), Abiomed carries a Zacks Rank #2 (Buy).
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