Merit Medical Embosphere Gets FDA De Novo Classification
Zacks Investment Research | Jun 25, 2017 09:17PM ET
Leading manufacturer and marketer of proprietary disposable devices, Merit Medical Systems, Inc. (NASDAQ:MMSI) recently announced the receipt of 513(f)(2) (de novo) classification for Embosphere Microspheres from the FDA to expand its indication in the prostatic artery embolization (PAE) space.
Notably, embolization is an artificial or natural formation of an embolus, a clot that travels through the bloodstream. Merit’s Embosphere Microspheres are clinically studied and proven round embolics, providing sustainable and predictable results for controlled and effective embolization. The device provides a non-surgical treatment option for men who suffer from Benign Prostatic Hyperplasia, a fatal disease that causes enlargement of prostate gland.
Per management, the prostatic artery embolization procedure uses Embosphere Microspheres to clog the prostatic arteries, causing a reduction in blood supply. This reduces the size of the prostate gland and improves symptoms.
Notably, Merit Medical’s Embosphere is the first embolic agent that has been okayed by the FDA for its 513(f)(2) classification in the prostatic artery embolization space. On this note, the FDA added the de novo classification pathway under section 513(f)(2) of the FD&C Act in 1997 to classify new devices which received a ‘Not Substantially Equivalent’ (NSE) determination for a 510(k) submission.
Bottom Line
We are upbeat about the lucrative prospects in the global niche space. A research report by the consulting firm GlobalData reveals that the global therapeutics market for Benign Prostatic Hyperplasia (BPH) is expected to reach a worth of approximately $4.9 billion by 2024, representing a CAGR of 8.23%. We believe Merit Medical will be able to bolster its footprint in the niche space in the days to come.
We are also optimistic about the long-term expected growth for the stock of 9.7% and projected sales growth of 19.2%, significantly higher than the industry average of 2.1%.
Of the other major developments, we are upbeat about Merit Medical’s HeRo platform. The launch of the proprietary Super HeRO and HeRO Ally products also opened up significant opportunities for the company. Notably, the HeRo product line was acquired by Merit Medical from CryoLife earlier this year. Per management, the ‘Think HeRO Graft Training program’ in the HeRo platform is likely to provide substantial scope over the long run.
Meanwhile, some promising stocks from the broader medical sector are Inogen Inc. (NASDAQ:INGN) , Luminex Corporation (NASDAQ:LMNX) and IDEXX Laboratories, Inc. (NASDAQ:IDXX) .
Inogen has a long-term expected earnings growth rate of 17.50%.
Luminex has a long-term expected earnings growth rate of 16.3%. The stock posted a positive earnings surprise of 237.5% in the last reported quarter.
IDEXX Laboratories has a long-term expected earnings growth rate of 19.37%.
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