Irvine-based patient monitor maker Masimo Corp.’s long-term growth prospects remain attractive, an analyst said this month.
“We believe the company is well-positioned to maintain annual double-digit top-line growth, as its guidance implies,” said Chris Lewis, who follows Masimo for Newport Beach-based Roth Capital Partners LLC.
Masimo gave 2014 guidance as part of its fourth-quarter and 2013 earnings report on Feb. 13. The device maker said it could see a full-year profit of $65.3 million to $74 million on total revenue of $578 million to $598 million.
It posted a $58.4 million profit on $547.2 million in revenue in 2013.
Wall Street expects Masimo to post a full-year profit of $67.7 million on revenue of $581.5 million.
Lewis wrote that several factors support his analysis:
• Increased penetration of general hospital wards with Masimo’s devices.
• Introduction of devices containing Masimo’s rainbow technology by Royal Philips Electronics NV and General Electric Co. in the second half of the year.
• More contributions from Masimo’s hemoglobin blood management sales force. (Lewis wrote that the company has hired 50 of an expected 60 sales representatives to date.)
• Acceleration of consumable sensor sales as a result of more sales and use of equipment.
• And “new product introductions, which we expect to hear more details on in the coming quarters,” Lewis said.
Masimo “remains well capitalized,” with $95.5 million on its balance sheet and no debt as of Dec. 31, Lewis said.
The device maker “has two potential acquisition targets on its radar at this point, which we would expect to be of the smaller, tuck-in nature,” he wrote.
Lewis did note, however, that Masimo’s wider guidance range came about because of uncertainty surrounding the device maker’s future royalty revenue streams coming from competitor Covidien PLC. Covidien has provided Masimo with royalty revenues as a result of patent lawsuit settlements.
In other Masimo news, the company said that it would ask a federal court to overturn an arbitrator’s $5.4 million award of damages earlier this month to a pair of former salesmen in an employment-related case.
The arbitrator agreed with the plaintiffs’ claim that Masimo knowingly required them to sell inaccurate blood monitors that endangered patient safety.
Masimo said that the arbitrator’s decision contradicted a federal court ruling that showed that there was no evidence that Masimo had made “knowingly misleading” statements about its monitors. The company said the earlier ruling threw out a separate case in which the former salespeople had sued the device maker as whistleblowers.
Pharmacy School Makes Hires
Chapman University said this month that it hired a pair of department chairs for its school of pharmacy, which is set to open in the fall of 2015.
The university is recruiting its initial class of students.
The new chairs are Jeff Goad and Reza Mehvar. Their appointments are effective June 1.
Goad was most recently an associate professor and vice chair of continuing professional development, credentialing and distance education at the University of Southern California’s School of Pharmacy.
Mehvar has been with the Texas Tech School of Pharmacy since 1999.
His positions have included director of the pharmacokinetics core curriculum offered by the pharmacy school’s clinical pharmacology and experimental therapeutics center; professor of pharmaceutical sciences; and interim co-chair of the department of pharmaceutical sciences.
Chapman said in a news release that its school will offer “science-based, personalized, interdisciplinary training,” among other things.
It will be on the university’s new Harry and Diane Rinker Health Science campus in Irvine.
Retinal Program Proceeds
Irvine-based California Stem Cell Inc. is working with the University of California, Irvine, to create transplantable 3-D retinal tissue through stem cells.
The pair started a study this month funded by a $4.5 million grant from the California Institute of Regenerative Medicine.
California Stem Cell will use human stem cells to create retinal progenitor cells, it said in a news release.
Those cells will be combined with retinal pigment epithelial tissue to create a 3-D tissue suitable for transplantation, according to the release.
Proof-of-concept studies will take place at UCI’s Sue and Bill Gross Stem Research Center.
The company said that if the study is successful, it could lead to the development of new treatments for currently incurable diseases, like retinitis pigmentosa and age-related macular degeneration.
“This study establishes a valuable partnership between ourselves and a team of very talented scientists at a university known for its excellence in research,” said Hans Keirstead, California Stem Cell’s chief executive. Keirstead is a longtime UCI faculty member who has taken a leave from the university as he runs California Stem Cell.
