Study: Teleflex Catheter Reduces Costs - Analyst Blog

Shares of Limerick, PA-based specialty medical devices provider Teleflex Incorporated TFX reached new 52-week high of $106.70 in mid-day trading yesterday following the announcement of study results favoring the use of the company's ARROW Central Venous Catheter CVC with ARROWg+ard Blue PLUS Technology. Shares of the company closed at $106.10 on the same day, representing a solid one-year return of 29.8%.

The study, conducted by Leonardo Lorente M.D., Ph.D. and his colleagues independently, found that the Teleflex's ARROW catheter with ARROWg+ard Blue PLUS Technology lowers the risk of catheter-related bloodstream infections (CRBSIs) and decreases direct treatment costs of these fatal infections.

Lorente and his fellow colleagues compared the antimicrobial protected ARRROW catheter with an unprotected CVC. They found that the cost per catheter day of the protected catheter was about half that of the unprotected catheter.

Moreover, the ARROWg+ard Blue PLUS catheter achieved zero infections in the study. In contrast, the unprotected catheters were associated with infections in 2% of cases.

The study included the costs of CVCs, infection diagnosis, and antimicrobials used to treat patients who suffered infections. It has involved patients admitted in ICU of the Hospital Universitario de Canarias in Tenerife, Spain.

The patients received one or more internal jugular venous catheters. The study examined a total of 636 catheters and 3,271 catheter days.

Shares of Teleflex started escalating following its impressive 2013-fourth quarter results and promising 2014 guidance on Feb 21. The company posted an 18.3% rise in adjusted earnings to $1.36 per share for the fourth quarter of 2013 from $1.15 in the same quarter of 2012. With this, earnings significantly beat the Zacks Consensus Estimate by 9 cents.

Net revenues went up 7.5% to $450.5 million, exceeding the Zacks Consensus Estimate of $436 million. Excluding foreign exchange fluctuations, net revenues rose 6.9% from the prior-year quarter.

The increase in revenues was attributable to contribution from the acquisitions of LMA International in Oct 2012 and Vidacare Corporation in Dec 2013, an increase in the average selling price of products, launch of new products and an additional shipping day in the reported quarter versus the same quarter of 2012.

For 2014, Teleflex anticipates revenue growth between 6.0 and 8.0% versus 2013. In constant currency, the company expects revenues to increase by 7.0 and 9.0%.

Teleflex also expects adjusted earnings per share in the range of $5.35 to $5.55 for 2014, reflecting a 6.4 to 10.3% rise from 2013. The current Zacks Consensus Estimate of $5.52 lies at the upper end of the guided range.

Currently, Teleflex carries a Zacks Rank #2 (Buy). Other players in the medical instruments industry that also worth a look include Cynosure, Inc. CYNO, Syneron Medical Ltd. ELOS, and ABIOMED, Inc. ABMD. Both Cynosure and Syneron Medical sport a Zacks Rank #1 (Strong Buy), while ABIOMED carries a Zacks Rank #2 (Buy).