Intersect ENT XENT is progressing well with the expansion of its product pipeline, which includes the SINUVA Implant. However, a tough competitive landscape and pricing pressure are likely to offset these positives to some extent.
This $784.4-million worth commercial drug delivery company expects earnings growth of 7.6% over the next five years. Also, the company has a trailing-four quarter negative earnings surprise of 7.9%, on average.
Let’s delve deeper into the factors that substantiate the company’s Zacks Rank #3 (Hold).
Strong Portfolio Expansion: In order to maintain its position in the ENT specialty market and widen its sales base, Intersect ENT is focusing on product development and innovation. In this regard, the company also recently completed the ENCORE Study, a small 50-patient open label program, designed to evaluate the safety of the repetitive use of SINUVA. Intersect ENT announced the ASCEND Study results as recently as October 2019. These developments should continue to contribute to the company’s top line in the near future.
Intersect ENT, Inc. Price
SINUVA Line Progresses Well: Within a short span of time, the SINUVA business line made a considerable advancement with market access. On the clinical front, both physician and patient feedback continues to be favorable. The company consistently delivers turnaround times of less than 2 weeks per prior authorization while payer coverage remains stable. As of the third quarter of 2019, around 2800 patients were treated with SINUVA since the start of its commercialization, which witnessed an increase of approximately 600 patients in the quarter.
Propel Exhibits Solid Growth: With Intersect ENT’s Propel line, the company is hopeful about product growth on the addition of accounts and an extensive usage of Contour among both current and new physicians. In July 2019, the company received FDA approval for a new Straight Delivery System (SDS), which will replace the PROPEL Ministeroid. The additional and strategic sales support deployed by the company is expected to fuel growth for the PROPEL franchise in the long term.
However, there are a few factors marring the company’s growth prospects.
Tough Competitive Landscape: The commercial drug delivery industry is highly competitive and is subject to changes. It is also significantly affected by product launches and other activities of the industry participants. Many companies developing or marketing ENT products are publicly-traded entities including Medtronic, Olympus, Johnson & Johnson, Stryker and Smith & Nephew.
Pricing Pressure Persists: Intersect ENT is grappling with pricing pressure from its hospital and ambulatory surgery center customers due to cost sensitivities resulting from cost-containment pressures in healthcare and reimbursement changes. This could dwindle demand for the company’s PROPEL family of products, lower prices that customers are willing to pay and reduce the frequency of the use of products, which could leave an adverse effect on the company’s business.
Which Way Are Estimates Treading?
For the fourth quarter of 2019, the Zacks Consensus Estimate for loss is pegged at 33 cents. The same for revenues is pegged at $30.9 million, calling for a decline of 5.9% from the prior-year reported number.
The Zacks Consensus Estimate for 2019 loss stands at $1.45. The same for revenues is pegged at $108.6 million, implying a 0.1% rise from the year-ago reported number.
Stocks Worth a Look
A few better-ranked stocks from the broader medical space are Haemonetics Corporation HAE, West Pharmaceutical Services WST and Omnicell OMCL. While Haemonetics sports a Zacks Rank #1 (Strong Buy) the other two carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics has a projected long-term earnings growth rate of 13.5%.
West Pharmaceutical Services has an expected long-term earnings growth rate of 14%.
Omnicell has a long-term earnings growth rate of 12.5%.
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