CareFusion Corp (CFN) recently announced the signing of an exclusive distribution agreement with Breas Medical for the latter’s Vivo line of ventilation equipment.
According to the agreement, CareFusion will be granted exclusive distribution rights in the U.S. for the Vivo line of life support and bi-level ventilators from Breas Medical, which includes Vivo 50, Vivo 40 and Vivo 30.
The Vivo product line has been specifically designed for home mechanical ventilation. It also integrates well with CareFusion's other ventilator products such as the AVEA, VELA, 3100A and 3100B HFOV, Infant Flow SiPAP, ReVel and LTV Series ventilators. The distribution agreement is open for extension in the future with additional products and territories.
Things seem to be right on track for CareFusion before its acquisition by Becton, Dickinson and Co. (BDX). The buyout, which is expected to close by Mar 31, 2015, is expected to provide CareFusion substantial synergies.
CareFusion recently reported a strong second quarter of fiscal 2015, which was likely its last one as an independent entity.
We are impressed with CareFusion’s earnings and revenue beat in the quarter, both of which also increased on year-over-year bases. The company continues to demonstrate strength across its Medical Systems and Procedural Solutions segments.
During the reported quarter, CareFusion executed contracts for its Pyxis dispensing technologies and Alaris infusion systems which, in our view, should drive growth further in the Medical Systems segment.
Also, the proposed merger with Becton, Dickinson has the potential to enhance the combined entity’s geographical reach and also drive international sales at CareFusion.
Under such circumstances, the recently inked distribution deal with Breas Medical will help CareFusion gain significant market traction in the U.S. We feel the partnership will enable CareFusion to increase its existing customer base by providing a wide range of ventilation equipment.
Zacks Rank
Currently, CareFusion carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical products industry include Abaxis (ABAX) and Vascular Solutions (VASC). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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