4 Medical Product Stocks Likely To Top Q4 Earnings Estimates

Carrying forward the momentum achieved in the initial months of 2018, the back half of the year also proved to be rewarding for the global medical products space in terms of research and development (R&D). Starting from invention of the artificial pancreas, human-brain pacemaker, an electronic skin that displays vital signs of the body, needle-free injections and many more, the medical products fraternity was in the limelight this period.

In November, the FDA attempted to modernize the 510(k) clearance pathway, which accounts for the majority of FDA device reviews. According to a December article published in Investing News, “the changes are meant to create a safer product for patients while holding companies accountable for any safety discrepancies, all while holding on to the FDA’s gold standard for safety.” Prior to that, the FDA had approved a gene therapy for the treatment of inherited retinal disease.

Considering the positive backdrop, it will be interesting to see how the sector players are poised ahead of their earnings release.

What’s Benefiting Medical Device Stocks?

Going by a CISION report, the United States is the largest Medical Product market in the world, raking in more than $180 billion in revenues a year. Thus, it has been a very profitable investment space of late.

The Medical Product space has been benefiting from favorable consumer behavior, growing prevalence of minimally-invasive surgeries, demand for liquid biopsy tests, use of IT for quick and improved patient care and the shift from a payment system to a value-based model.

The Tax Cuts and Jobs Act, which slashed corporate tax rates to 21% from the earlier 35%, will continue to benefit industry players.. This apart, the bipartisan two-year suspension of the Medical Device tax earlier in 2018, which imposed a 2.3% excise tax on MedTech manufacturers, has been a huge relief. Both the developments are expected to boost hiring and investment among the U.S.-based medical-product manufacturers. This should get reflected through the fourth-quarter performances of the industry players.

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