(OMCL) Omnicell’s G4 Platform Reaches China

Recently, Omnicell (OMCL) announced the launch of Mandarin-language versions of its G4 platform for clinical use in China. Following the launch of G4 medication automation platform in English-speaking markets earlier this year, the language conversion of medication cabinets will enable Chinese hospitals to utilize all the advanced operational improvements of G4. The latest move on the company’s part is consistent with its strategy of further expanding in the international market.

In China, this system was first implemented at Peking Union Medical College Hospital (PUMCH). A recently completed multi-month pilot study at PUMCH showed that the Omnicell ADCs on Mandarin-language conserve workforce for locating medications by nearly two hours per day.

Additionally, Omnicell announced a partnership with China Resources Beijing Pharmaceutical Co. Ltd., which is a subsidiary of China Resources Pharmaceutical Group for distributing Omnicell automated medication dispensing systems in the nation. Earlier this year, the Chinese Ministry of Commerce released a five-year plan that commits the Chinese pharmaceutical distribution industry to consolidate into 3 primary pharmaceutical suppliers, one of which is China Resources Pharmaceutical.

Given the fact that very few hospitals in the international market have adopted medication control systems, Omnicell aims to derive 20% of its revenues from international operations going ahead compared to the current level of 5%. To achieve this, the company seeks to expand its international footprint through various strategies.

The company expects the adoption curve to show an ascending pattern going forward as it is on to the verge of developing products by deploying new technologies to capture more market share from its competitors and continue winning more deals.

Considering the rising investment in information technology (IT) by healthcare providers and taking into account the huge under-penetrated market for automated healthcare management systems in China, we expect Omnicell’s initial entry into the Chinese market to further enhance the company’s international endeavor in due course.

Presently, outside US, Omnicell operates in Canada, Europe, South America, Australia and Asia with supply chain sourcing in Asia. Despite the tough economic conditions in Europe and intense competition from major players such as CareFusion Corporation (CFN) and McKesson Automation (MCK), we are optimistic about Omnicell’s growth prospects in the international arena. Currently, Omnicell retains a short-term Zacks #1 Rank (Strong Buy).

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