Mystery Opioid Overdose Device May Be $1 Billion Opportunity

(Bloomberg) -- Wall Street may not know much about a device from Masimo Corp. to detect patient opioid overdoses, but sales could eventually reach more than $1 billion in sales, Needham analyst Michael Matson told clients in a note.

The risk of Masimo’s device not securing regulatory approval is low after the company was selected to take part in a Food and Drug Administration program to develop new treatments to tackle the opioid crisis last November. Masimo hasn’t yet provided an estimate on market size.

But the $1 billion estimate comes with a few caveats, Matson said in a phone interview, among them, questions surrounding the device’s price, how widely it will be adopted or the speed with which competitors follow with their own products.

Investors may also share such optimism. Masimo has rallied 23 percent so far this year, more than double its S&P midcap med tech peers. Shares rose as much 1.8 percent to $134.29 intraday, approaching March 1 record of $134.45.

Masimo’s product, meant to be used in the home, is in late stage development and will use existing oximetry technology to alert caregivers when it detects low oxygen levels in patients taking painkillers. For more details, the Street will have to wait for the device maker’s investor day on May 16, where management has promised to reveal more.

To contact the reporter on this story: Cristin Flanagan in New York at cflanagan1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Scott Schnipper

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