Medical device major Boston Scientific Inc. BSX recently entered into a strategic alliance with Preventice Solutions – a leading provider of wearable cardiac monitors – to expand its portfolio of remote monitoring solutions. Financial terms of the deal have been kept under wraps.
Per the deal, Boston Scientific has bought considerable shares in the privately-held Preventice Solutions, which is a prominent developer of mobile health solutions and services. On closure of the deal, as the exclusive global sales and marketing representative for Preventice Solutions, Boston Scientific will market the former’s entire portfolio of cardiology-related diagnostic and monitoring products.
With the number of heart failure (HF) patients increasing on an alarming basis, the huge cost of hospitalization, combined with the inconvenience of long-hospital stays of patients, has become a major burden on the healthcare system. To resolve this issue, remote patient monitoring is the need of the hour. We believe, this partnership to be a perfect fit for Boston Scientific in expanding the company’s foothold in the $1 billion cardiac diagnostics and monitoring market.
Preventice Solutions' PatientCare Platform and the BodyGuardian portfolio of cardiac monitors are complemented by its monitoring services including data transmission, surveillance, reporting, interpretation and integration into a healthcare provider's workflow.
Management at Boston Scientific believes this collaboration with Preventice Solutions will allow it to extend the benefits of remote monitoring to a wider range of patients – a critical step to improve patient outcomes and reduce healthcare costs.
Currently, the global cardiac monitoring and cardiac rhythm management (CRM) devices market is poised to reach $26,646.5 million by 2020 from $21,137.7 million in 2015, at a CAGR of 4.7% from 2015 to 2020. We believe the aforementioned strategic alliance will enable Boston Scientific to capture a larger share of this market potential, going forward.
In this context we note that, management expects to witness some softness in Boston Scientific’s U.S. CRM business through the remaining quarters of 2015, owing to replacement headwinds and competitive launches. However, we expect the said alliance to enhance the company’s revenue growth from this business, going ahead, given that Boston Scientific will be the sole distributor of the renowned cardiac monitors developed by Preventice Solutions.
Currently, Boston Scientific holds a Zacks Rank #3 (Hold). Some better-ranked medical product stocks are Abaxis, Inc. ABAX, Hospira Inc. HSP and NuVasive, Inc. NUVA. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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