NxStage Kidney Care Inc. – a subsidiary of MA-based manufacturer of innovative dialysis products NxStage Medical Inc. NXTM – recently announced the opening of a new dialysis center in Monroeville, PA. The center will offer flexible therapies and high-quality personalized care to dialysis patients and their families.

Like all other NxStage Kidney Care facilities, the Monroeville center also offers modern amenities and a quiet and relaxed environment to improve patient care. However, the focus at this facility is on home dialysis training and education about treatment options. By focusing on each patient’s individual needs, the center aims to develop a safe, effective and flexible therapy plan for every patient.

Located in Allegheny County, the company’s latest facility will offer multiple customized therapy options using NxStage System One including home hemodialysis, home nocturnal hemodialysis, flexible in-center hemodialysis and short-term respite care. In addition, the center will offer peritoneal dialysis therapy.

NxStage System One is a home hemodialysis system designed to overcome the challenges of home hemodialysis posed by traditional equipment. It is the only portable hemodialysis system cleared for home use. In Dec 2014, the system was also cleared by the FDA to perform hemodialysis overnight while the patient is at home. This makes it the first and only hemodialysis machine cleared for this indication.

We believe that the FDA-clearance of the system has opened up home hemodialysis therapy to new segments of patients, which will help improve care for End Stage Renal Disease (ESRD) patients by expanding therapeutic options and flexibility. In our opinion, NxStage will continue to benefit from strong adoption of its hemodialysis systems in the Home segment.

By leveraging NxStage's home leadership and the innovative technology of its System One, NxStage Kidney Care is working on a dialysis care model that is intended to support and encourage patient-centered care and provide enhanced access to the benefits of home therapy as well as flexible in-center options.

In Feb 2015, NxStage Kidney Care opened two new dialysis centers in the suburbs of Boston, MS. Earlier this month, the subsidiary also opened a new dialysis facility in Greenbelt, MD. We note that the subsidiary has around 14 dialysis centers and kidney care facilities across the U.S.

In its recently concluded fourth-quarter 2014, NxStage Medical beat the Zacks Consensus Estimate on both fronts. We were particularly impressed with the stellar performance of the company’s System One segment which drove significant top-line growth.

The company expects total revenue for full-year 2015 in the band of $324–$328 million while NxStage Kidney Care is expected to achieve annual net revenues of $3 million. However, significant investment in NxStage Kidney Care is expected to impact the bottom line, going forward.

Stocks to Consider

Currently, NxStage carries a Zacks Rank #3 (Hold). Better-ranked stocks in the medical products industry include Cardiovascular Systems CSII, LeMaitre Vascular LMAT and SurModics SRDX. All three stocks sport a Zacks Rank #1 (Strong Buy).

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