In a recent breakthrough, Masimo Corporation MASI announced that its Next Generation SedLine brain function monitoring has received clearance from the FDA.
The device will provide clinicians real-time insight into a patient’s depth of anesthesia and facilitate timely assessment of vital status. The approval is likely to fortify Masimo’s foothold in the neurological space.
Shares of Masimo have moved up 2.8% to $94.08 on Jan 29, post the announcement.
Masimo Corporation Price and Consensus
Masimo Corporation Price and Consensus | Masimo Corporation Quote
About Next Generation SedLine
Per the company, SedLine will help clinicians in monitoring the state of brain under anesthesia with bilateral acquisition and processing of four leads of electroencephalogram ("EEG") signals. The product features an enhanced signal processing engine, thereby driving a variety of performance improvements. Thus, the device provides a more complete picture of the brain compared with the company’s earlier anesthetic products.
Next Generation SedLine provides an enhanced Patient State Index (PSi) — a processed EEG parameter related to the effect of anesthetic agents — based on its enhanced signal processing engine. It displays an enhanced, Multitaper Density Spectral Array (DSA), which represents activity in both sections of the brain. When displaying a Multitaper DSA, EEG data are transformed into the frequency domain and may provide a better display of EEG features.
Per management, SedLine is expected to enhance brain function monitoring just as SET impacted pulse oximetry, one of the company's pioneering technologies, introduced in 1995.
Further, along with RD SedLine EEG Sensor, Next Generation SedLine can be used simultaneously with O3 regional oximetry on the Root patient monitoring and connectivity platform for a deeper insight into a patient’s brain.
Neurological Diseases Escalate
According to American Neurological Association, the most common neurological diseases cost the United States $789 billion in 2014. The figure is likely to grow as the elderly population will double between 2011 and 2050.
Thriving Market Trends
Per a research by MarketsandMarkets, the global brain monitoring market is expected to reach $12.22 billion by 2021 from $8.80 Billion in 2016, at a CAGR of 6.8% from 2016 to 2021. The increasing incidence of neurological disorders, rising awareness about neurodegenerative diseases, growth in the number of traumatic brain injuries and technological advancements are major factors driving demand for brain monitoring devices. Meanwhile, the shortage of trained professionals to effectively operate brain monitoring devices and unfavorable reimbursement policies are restraining growth of this market.
Share Price Performance
Masimo has been underperforming the broader industry over the last year. The stock has gained 27.9%, lower than the industry’s return of 33.6%. However, it is expected that positive developments will revive the company in the upcoming days.
The company’s projected long-term earnings growth is 10.1%.
Zacks Ranks & Key Picks
Masimo carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are, BIOVERATIIV BIVV, Magellan Health MGLN and PINC. Each of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank Stocks Here.
BIOVERATIV has a long-term growth rate projected at 14%. In the last six months the stock has returned 66.1%, surpassing the industry’s rally.
Magellan has a long-term growth rate projected at 14.05%. In the last six months the stock has returned 36.3%, outperforming the broader industry.
Premier has a long-term growth rate projected at 12%. Over the last month, the stock has returned 15.8%, above the broader industry’s gain.
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