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Masimo's (MASI) W1 Medical Watch to Boost Patient Monitoring

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Masimo Corporation (MASI - Free Report) recently announced the receipt of the FDA’s 510(k) clearance for over-the-counter (OTC) and prescription use (Rx) of the Masimo W1 medical watch. The FDA clearance expands the indications for the Masimo W1 in the United States as a medical device for use by adults in hospitals, clinics, long-term care facilities and at home.

Notably, Masimo W1 is the first FDA-cleared watch to provide continuous real-time oxygen saturation and pulse rate for OTC and Rx use.

The latest regulatory clearance is expected to significantly strengthen Masimo’s patient monitoring business on a global scale.

Significance of the Approval

Per Masimo, the Masimo W1 medical watch has been developed to be comfortable and lifestyle-friendly. This is expected to empower users with untethered continuous pulse oximetry as they continue with their daily lives.

The Masimo W1 is clinically powered by its integrated Masimo MW-1 sensor, hardware and software module. This module incorporates Signal Extraction Technology (SET) pulse oximetry features, combining them into a unified wearable unit. The device is equipped with an integrated optical sensor and electrode pads for electrocardiogram readings, enabling the detection of various physiological signals.

Per management, clinicians at various institutions in Europe and the Middle East are already using Masimo W1 in numerous innovative ways. Management expects to bring the hospital-to-home innovations of the Masimo W1 to the United States and the empowerment of patients at home following the FDA clearance.

Industry Prospects

Per a report by Mordor Intelligence, the global patient monitoring market is anticipated to reach from $43,808.29 million in 2023 to $62,571.34 million by 2028 at a CAGR of approximately 7.4%. Factors like the rising burden of chronic diseases due to lifestyle changes, growth in the elderly population, increasing preference for home and remote monitoring and the ease of use of portable devices are expected to drive the market.

Given the market potential, the latest FDA approval is likely to provide a significant boost to Masimo’s business.

Recent Developments

This month, Masimo announced a joint agreement with GE HealthCare. The collaboration is expected to integrate Masimo SET pulse oximetry into GE HealthCare’s Portrait Mobile wireless and wearable patient monitoring solution.

The same month, Masimo reported its third-quarter 2023 results. Per management, its healthcare business is transitioning away from COVID-era conditions. It is beginning to see customer behavior and sensor purchasing patterns shifting back to the pre-pandemic growth trend line.

Last month, Masimo announced that its non-invasive, continuous parameter designed to provide additional insight into a patient’s oxygen status in the moderate hyperoxic range under supplemental oxygen, ORi, had been granted a De Novo by the FDA.

Price Performance

Shares of Masimo have lost 32.5% in the past year compared with the industry’s 6.6% decline. The S&P 500 has witnessed 14.9% growth in the said time frame.

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Zacks Rank & Stocks to Consider

Currently, Masimo carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , HealthEquity, Inc. (HQY - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .

DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 18.3%. DVA’s earnings surpassed estimates in all the trailing four quarters, with an average surprise of 36.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.

DaVita’s shares have gained 35.3% compared with the industry’s 4.7% rise in the past year.

HealthEquity, flaunting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 26.7%. HQY’s earnings surpassed estimates in all the trailing four quarters, with an average of 13%.

HealthEquity’s shares have gained 6.9% against the industry’s 12.4% decline in the past year.

Integer Holdings, sporting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.9%.

Integer Holdings’ shares have rallied 24.6% against the industry’s 6.6% decline in the past year.

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