ZOLL Propaq M Gets FDA Green Signal - Analyst Blog

Resuscitation devices maker ZOLL Medical (ZOLL) has secured 510 (k) approval from the U.S. Food and Drug Administration (FDA) for its Propaq M monitor, a transport monitor designed to address needs of military customers and air medical operations globally.

The Propaq M is a monitor-only version of the company’s Propaq MD defibrillator (developed in collaboration with the Department of Defense and leading medical diagnostic devices maker Welch Allyn) which was approved in July 2010. It is also being developed under the same collaboration, assisted by grants from the U.S. Army Medical Research and Development Command.

This transport monitor is an ultra-lightweight device which integrates the advanced, state-of-the-art capabilities with the well-established features of the existing Propaq monitors. The device boasts several new exciting features and is designed to have a similar user interface as the Propaq MD. This will offer significant cost-saving for military and air medical services.

ZOLL Medical develops and markets non-invasive resuscitation (an emergency life-support procedure) devices and related software solutions both in the U.S. and overseas markets. The company is expanding its presence in the international markets, representing a major impetus for growth.

ZOLL Medical is a leading player in the global market for external defibrillators, which is worth more than $1 billion. The company’s LifeVest defibrillator business, which has been its lifeblood, continues to grow at a healthy pace and has emerged as a major growth engine.

In the U.S. defibrillation market, ZOLL Medical competes with Physio-Control, a wholly-owned unit of Medtronic (MDT), and Philips (PHG). The company remains committed to expanding its product range to sustain growth in this market.

Propaq MD represents a major boost for ZOLL Medical’s military-focused business which is struggling recently with depressed sales. The approval of Propaq M has further broadened the company’s military product offerings, providing a major opportunity to expand its share in this market.

We believe that ZOLL Medical’s wide range of products coupled with its expansion initiatives will continue driving the company forward in the coming years. However, a still weak capital spending backdrop and foreign exchange headwinds remain concerns. Currently, we have a Neutral recommendation on the stock.