Integer (ITGR) To Co-Develop CCM Therapy With Impulse Dynamics
Zacks Investment Research | Dec 08, 2016 09:21PM ET
Leading medical device outsource manufacturer Integer Holdings Corporation (NYSE:ITGR) announced that it has signed a development agreement with Impulse Dynamics to co-develop its next-generation Lead System for Cardiac Contractility Modulation (CCM) therapy. In addition, the companies also have agreed to negotiate a supply agreement for the associated products under the development agreement.
The stock represents a negative year-to-date return of almost 44.0%, much wider than the Zacks categorized Medical Instruments sub-industry’s negative return of 2.3%.
However, we are positive about the new agreement with Impulse Dynamics. Even the markets reacted positively to the agreement and shares of Integer Holdings followed the trend. The stock rose almost 4.1% to close at $30.70 following the news release. Also, a long-term expected earnings growth rate of 15.0% and a projected sales growth of 16.4% instilled some confidence in its investors.
Meanwhile, the estimate revision trend for the stock has been mixed as one estimate moved north and one moved south in the last two months. Notably, the current year estimate for the stock stands at $2.61 per share.
Our bullishness on Integer Holdings’ focus on the CCM market is owing to the fact that it has the potential to grow rapidly. CCM is a method for treating moderate-to-severe heart failure by delivering non-excitatory electrical pulses to the heart. According to the Journal of the American College of Cardiology, heart failure is a global public health problem affecting an estimated 26 million worldwide. In the United States alone, the prevalence is 5.7 million with 670,000 new cases each year.
We believe that both the companies would benefit from the agreement. By leveraging Integer’s existing technology platform with Impulse Dynamics’ unique specifications, the duo would be able to deliver a fully customized lead solution to the CCM market 12 to 16 months earlier than developing one on their own.
Integer Holdings is a medical device outsource manufacturer. The company serves the cardiac, neuromodulation, orthopedics, vascular, advanced surgical and power solutions markets. It also develops batteries for high-end niche applications in energy, military and environmental markets.
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Currently, Integer Holdings has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical sector include Addus HomeCare Corporation (NASDAQ:ADUS) , LHC Group, Inc. (NASDAQ:LHCG) and HMS Holdings Corp. (NASDAQ:HMSY) . Addus HomeCare and LHC Group sport a Zacks Rank #1 (Strong Buy), while HMS Holdings carries a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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