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Cardinal Health to Gain From FDA Panel Vote for INCRAFT PMA

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Cardinal Health’s (CAH - Free Report) premarket approval (PMA) application for INCRAFT (INCRAFT Stent Graft System) recently received favorable recommendation from the FDA. The Circulatory System Devices Panel of the Medical Devices Advisory Committee voted 11 to 4 in favor of the system.

Notably, the INCRAFT system comes under Cardinal Health’s Cordis unit, which was acquired earlier in 2015. However, by the end of third-quarter fiscal 2018, the Cordis unit’s performance lacked luster. It significantly affected Cardinal Health’s earnings and effective tax rate.

Hence, the PMA for the INCRAFT system has been a timely one which will help Cardinal Health secure a broader customer base for the Cordis unit.

The INCRAFT System at a Glance

The INCRAFT system is a cardiovascular platform.

It has an advanced endovascular aneurysm repair (EVAR) technology for the treatment of infrarenal abdominal aortic aneurysms (AAAs), a severe and complex condition.

Per an article by Experimental & Clinical Cardiology, AAA rupture causes 4500 deaths each year in the United States, with an additional 1400 deaths resulting from the 45,000 repair procedures performed to prevent rupture.

Market Prospects

Per Research and Markets, the global market for cardiovascular devices reached nearly $42.4 billion in 2017 and should scale to $59.1 billion by 2022 at a CAGR of 6.9% in the 2017-2022 period.

The report further states that with medical needs of patients at an all-time high, any increase in incidences will lead to significant growth of the cardiovascular market.

Price Performance

We believe that positive developments will boost the shares of Cardinal Health, which have declined 28.5% in a year’s time, comparing unfavorably with the industry’s gain of 8.8%.

Other Major Products

Cardinal Health’s Medical and Pharmaceutical offerings lend the company a competitive edge in the niche space. The company offers industry expertise and an expanding portfolio of safe products. For example, Cardinal Health’s Bathroom Safety, Mobility, and Exam Room Equipment products are exclusively designed for patients and care givers. With a variety of products, ranging from wheelchairs and crutches to exam room tables and commodes, Cardinal Health offers the right mix of medical equipment.

Cardinal Health’s ECG Monitoring Electrodes offer quality performance and are free of neoprene, lead and mercury. These are not made with natural rubber latex and are highly exclusive in the markets.

Cardinal Health offers a full line of baby products as well, which includes Baby Shampoo & Body Wash, Baby Lotion, Baby Powder, Baby Oil and more.

Zacks Rank & Key Picks

Cardinal Health currently carries a Zacks Rank #5 (Strong Sell).

A few better-ranked stocks in the broader medical space are Abiomed, Inc. , Genomic Health, Inc. and Stryker Corporation (SYK - Free Report) .

Abiomed has a long-term growth rate of 27%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Genomic Health has an expected growth rate of 187.5% and a Zacks Rank of 1.

Stryker has a projected long-term earnings growth rate of 9.8%. The stock carries a Zacks Rank #2.

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