(KCI) Kinetic Concepts Launches Wound Registry Program

Kinetic Concepts Inc. (KCI) recently collaborated with the Academy of Wound Technology to develop the Transcontinental Wound Registry (TWR), which is touted as the first worldwide registry on wound healing and wound care technologies. The company intends to present the pilot phase results of this TWR at the 4th Congress of World Union of Wound Healing Societies during September 2 to September 6, 2012 in Japan.

Kinetic expects this TWR to ease the wound care community’s efforts to provide better treatment plans through clinical optimization and economic outcomes in wound healing and tissue repair. While the project will be funded by KCI, the development will be done by the Academy of Wound Technology. The company also expects this effort to yield better wound healing options and provide the doctors with clearer insights into the unique treatment needs of each patient.

Kinetic’s Active Healing Solutions (AHS), which generated 68% of the company’s total revenues in the first quarter of fiscal 2011, offers advanced wound healing and tissue repair systems incorporating proprietary Negative Pressure Technology Platform (NPTP) to suffice the needs of specific care settings and patient requirements.  The NPTP comprises three primary product categories namely, Negative Pressure Wound Therapy (NPWT), Negative Pressure Surgical Management (NPSM) and Negative Pressure Regenerative Medicine (NPRM).

Kinetic has undertaken several strategic initiatives to drive growth in the AHS segment. The company continues to penetrate the existing and newer geographic markets with the expansion of its product offerings. In the APAC region, AHS business witnessed a robust 70% increase in sales during the quarter primarily driven by significant growth in the large and under-penetrated Japanese market with its core NPWT product V.A.C. Therapy. The company expects to generate more than $25 million in revenues during 2011 from Japan. The company also launched the NPWT products commercially in China and India.

Moreover, given the host of product launches under its V.A.C. therapy system, the AHS business is gradually streamlining its position globally. During the quarter, the company witnessed gradual improvement in this segment based on higher unit volumes in the US, resulting from increased usage of traditional VAC Therapy products and new negative pressure-based therapies.

However, concerns related to a challenging economic environment and competitive landscape are headwinds for the stock. If any of the key patent claims go against Kinetic, the company’s market share in the V.A.C. therapy will likely plunge.

Currently, we maintain our ‘Outperform’ rating on the stock.

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