Omnicell Gains Foothold in Qatar

Omnicell Inc. (OMCL - Analyst Report), provider of end-to-end automation solutions for medication-use process, continues to expand its client base. The company along with its partner Mannai Corporation has been selected as the exclusive provider of automated medication management solutions throughout the Sidra Medical and Research Center in Doha, Qatar.

Sidra Medical and Research Center, which is currently under construction, will be focusing on woman and child health on a regional and global basis. This center will be a complete digital facility with 400 beds at the beginning with an expansion plan of up to 550 beds at a later phase. To support its all-digital facility, Sidra will deploy Omnicell’s G4 platform.

The decentralized pharmacy model of the company’s G4 platform is expected to enhance nursing workflow and standards of patient care at Sidra. Considering that the company’s offerings were selected after a worldwide competitive review of medication automation technology, selection of Omnicell implies a clear competitive edge over other players.

In a concerted effort to offer unparalleled medical facilities, Sidra plans to standardize its management solutions by implementing other offerings from Omnicell to better manage its hospital. These include the Anesthesia Workstation, the Savvy mobile medication workstation and the Anywhere RN remote medication management system.

Our Take

Omnicell has already established its presence in the Middle East. Last year, the company inked an agreement with King Faisal Specialist Hospital and Research Center, Riyadh (accredited by The Joint Commission International) to replace all of its operating systems with the company’s Anesthesia Workstations. The latest deal will expand Omnicell’s foothold in the Middle East market.

This is well-aligned with the company’s long-running goal of driving growth through expansion in international markets. Given that the overseas market is less than 1% penetrated, increasing awareness of automation benefits and higher investment in information technology by healthcare providers should provide incremental revenue opportunities for Omnicell.

Due to a glaring lack of favorable events over the recent past, the stock carries a Zacks Rank #3 (Hold) with no revision in estimates for the ongoing year. Thus, we look forward to the fourth-quarter results of Omnicell on Jan 31, 2013 which might encourage bullish sentiment. However, its peers CareFusion Corporation (CFN - Snapshot Report) and AmerisourceBergen Corporation (ABC - Analyst Report) carry a Zacks Rank #2 (Buy). ResMed (RMD - Snapshot Report), which reported a positive quarter last week, carrying a Zacks Rank #1 (Strong Buy) also warrants a look.