Henry Schein, Inc. (HSIC - Analyst Report), a worldwide distributor of healthcare products and services recently entered into an exclusive distribution agreement with Alma Lasers, Inc. a laser, light-based, radiofrequency and ultrasound devices for aesthetic and medical applications developer. The partnership will enable Alma Lasers to utilize the huge distribution network of Henry Schein across the US for marketing of its product Harmony ClearChoice.
Per the deal, the Foot and Ankle business of Henry Schein Medical will distribute Harmony ClearChoice to treat onychomycosis, a nail fungus variant. Earlier in March 2012, the Harmony laser technology platform of Alma Lasers received the US Food and Drug Administration’s clearance. This platform provides two discrete laser technologies to treat onychomycosisfrom inside.
With around 35 million people suffering from onychomycosis worldwide, this innovative technology is expected to go down well with the huge customer base of Henry Schein especially in the podiatry market. Moreover, being the sole technology to treat this challenging nail infection, the addition of Harmony ClearChoice is expected to boost Henry Schein’s medical business further in the upcoming period.
Henry Schein is currently focusing on expansion through strategic partnerships and acquisitions. Earlier this month, the company entered into another distribution agreement with non-invasive monitoring technology for patient care provider Masimo Corporation (MASI - Analyst Report) to distribute Masimo’s Pronto-7, the only US Food and Drug Administration (FDA) cleared small non-invasive device for spot-checking of total hemoglobin, SpO2, pulse rate and perfusion index.
Earlier in May, the company completed the acquisition of AUV Veterinary Services, the veterinary products distribution arm of the Netherlands-based AUV Group. Last year, the company closed significant acquisitions like Provet Holdings, the largest veterinary products distributor in Australia and California-based Alpha Scientific, a surgical, pharmaceutical and laboratory products distributor.
Henry Schein’s portfolio consists of consumable products, small equipment, laboratory products, large dental and medical equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins.
The company continues to experience strong top-line growth and has established its footprint in both domestic and international markets in dental, veterinary and medical supply distribution. We are also encouraged by the company’s focus on improving its cost structure to drive profitability. The stock retains a short-term Zacks #2 Rank (Buy).
Henry Schein’s performance should improve further with the gradual recovery in economic outlook. However, the company faces stiff competition from major players like McKesson Corporation (MCK - Analyst Report) and Patterson Companies Inc. (PDCO - Analyst Report). Over the long term, we have a Neutral recommendation on the stock.