Teleflex (TFX), HealthTrust Rebond On Respiratory Products
Zacks Investment Research | Dec 17, 2017 09:12PM ET
The respiratory division of Teleflex Incorporated (NYSE:TFX) has recently entered into a new group purchasing agreement with HealthTrust Purchasing Group (“HPG”) for respiratory heaters and accessories. The agreement by the name The Respiratory Heaters & Accessories (HPG-6071) became effective on Dec 1, 2017.
The agreement covers Teleflex’s full line of Active Humidification, Non Invasive Ventilation (NIV) and High Flow Nasal Cannula Therapy (“HFNCT”) products. More than 400 member hospitals of HealthTrust can now access Teleflex’s wide range of humidification products including the Hudson RCI Neptune Heated Humidifier with ConchaSmart Technology and ISO-GardHeated Wire Circuit Technology besides the recent introduction of Comfort FloPlus High Flow Nasal Cannula.
The contract also complements Teleflex’s existing General Respiratory Agreement (HPG-184) with HealthTrust. Both these contracts — exclusive for Teleflex — provide HPG members with an opportunity to consolidate their respiratory purchases with a single supplier.
Notably, HFNCT has been growing at 20% rate year over year. This therapy has been shown to improve patient outcomes and reduce 90-day mortality rates compared with noninvasive ventilation and Standard Oxygen Therapy. Based on this data, we expect Teleflex’s deal with HealthTrust to be strategically accretive to the former and might as well boost its top line significantly in the coming period.
Taking cues from above, Teleflex has been putting in a lot of efforts on strategic expansion and top-line growth. In September, the company had made a substantial investment in the growing field of Urology. It has made a $1.1 billion acquisition of NeoTract, a privately-held developer of minimally invasive and clinically effective devices.
Apart from strengthening Teleflex’s presence in the Urology market, the company expects this buyout to accelerate the company's near-term sales growth trajectory and provide it with significant sales channel opportunity. Additionally, this should enhance Teleflex's organic growth profile in the long term.
Over the past three months, Teleflex has been trading above the broader Zacks Investment Research
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