The novel coronavirus (2019-nCoV) outbreak has ravaged Wuhan in China and has spread to more than two dozen countries globally in the past two months. Scientists are trying to develop non-traditional vaccines. Authorities in China are struggling from the lack of adequate health facilities to treat the thousands affected.
The spread of the virus has been reported in countries like the United Arab Emirates and Germany. Per estimates, this new virus could cost the global economy $280 billion in just the first quarter of this year. Additionally, shortage in supply of medical aids like masks, gloves, goggles and facial shield is creating a sense of panic and endangering lives of medical workers.
Coronavirus Continues to Spread
Coronavirus has already claimed more than 900 lives. However, new cases outside Hubei have reduced and these show that the strict quarantine measures implemented by the Chinese authorities are yielding results.
Reports from the United Arab Emirates confirmed two more cases of the coronavirus on Feb 8 in one Chinese and one Filipino patient. On the same day, the U.S. embassy in Beijing confirmed that a 60-year old American lady, diagnosed with the virus in Wuhan, passed away.
Meanwhile, cruise liner Diamond Princess now has 70 confirmed cases of coronavirus and Japanese authorities have anchored and quarantined the ship off the coast of Yokohama.
Additionally, new cases have been reported in Germany and South Korea. Singapore has reported a total of 40 cases and increased alert level.
N95 Respirator Mask in Shortage
Though the number of new cases of coronavirus has declined beyond Wuhan borders, World Health Organization officials believe that coronavirus or novel coronavirus pneumonia (NCP) is much more contagious than severe acute respiratory syndrome (SARS). Here’s where infection-control strategy comes into play.
As NCP is highly contagious, facemasks and N95 respirators may help to shield the wearer to an extent from liquid droplets and airborne particles. N95 respirators can block at least 95% of small particles. Hence, they are the most suitable medical-grade masks in this case.
Per reports, Chinese officials are purchasing masks from companies that supply globally, which has led manufacturers to boost output. Evidently, Medicom Group, a Montreal-based mask maker has received a mail from the government of China to sell output from its factory in Shanghai to the local government. The company usually makes 170 million masks a year but has now received orders for 500 million.
Makrite, another mask producer typically makes 160,000 masks per day but production has dropped to 40,000 a day since the Lunar New Year holiday due to travel-related staffing gap.
Meanwhile, the U.S. Food and Drug Administration stated that none of the manufacturers it regulates has yet reported disruptions due to shortages.
5 Healthcare Suppliers to Watch
With the outbreak of the flu, demand for masks and protective gears has spurred. In fact, data provider, M Science reported that online sales of “dust, medical and respirator mask” have increased significantly from Jan 29 and surpassed sales during avian flu in 2017 and the flu season in 2018.
In the United States, the flu season is in full swing. Thankfully, only a dozen people have been infected with coronavirus so far but an increase in the number of cases can strain the country’s medical system.
Further, China is the dominant supplier of raw ingredients for penicillin, ibuprofen and aspirin, with imports affected due to coronavirus fears. Public health experts are closely watching reserves of vital medical supplies and medications.
Hence, given the current global health scenario, it is prudent that investors keep a close watch on these medical suppliers.
Cardinal Health, Inc. CAH manufactures, sources and distributes medical, surgical, and laboratory products. The company sources masks from private players like Makrite Industries Inc. and supplies to hospitals across the United States. The company is taking steps to monitor inventory and support existing customers based on demand.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 3.6% upward over the past 60 days.Cardinal Health carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McKesson Corporation MCK provides pharmaceuticals and medical supplies in the United States and internationally. The company is a prime player in the non-woven face mask market. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 2.6% upward over the past 60 days.McKesson carries a Zacks Rank #2.
3M Company MMM offers medical solutions, oral care, separation and purification sciences, health information systems, drug delivery systems, and food safety products. The company produces N95 respiratory mask. The Zacks Consensus Estimate for the company’s current-quarter earnings has been revised 0.4% upward over the past 60 days.3M Company carries a Zacks Rank #3 (Hold).
Premier, Inc. PINC operates as a healthcare improvement company in the United States. The company also identifies supply sources for drugs and medical supplies that are on or may be at risk of being added to the national drug shortage list, or that are vulnerable to pricing volatility, as well as direct sourcing business.The Zacks Consensus Estimate for the company’s current-year earnings has been revised 0.4% upward over the past 60 days.Premier carries a Zacks Rank #3.
Honeywell International Inc.’s HON safety products comprise personal protection equipment, apparel, gear, and footwear; gas detection technology.The company is currently ramping up production of surgical masks to keep up with the surging demand for masks globally. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 0.2% upward over the past 60 days.Honeywell carries a Zacks Rank #3.
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Click to get this free report Honeywell International Inc. (HON) : Free Stock Analysis Report 3M Company (MMM) : Free Stock Analysis Report Cardinal Health, Inc. (CAH) : Free Stock Analysis Report McKesson Corporation (MCK) : Free Stock Analysis Report Premier, Inc. (PINC) : Free Stock Analysis Report To read this article on Zacks.com click here.