GEHC Stock Gains Post FDA's Nod for Vizamyl's Expanded Indications

GE HealthCare Technologies Inc. GEHC has received the FDA’s approval for an updated label for its positron emission tomography (PET) imaging agent Vizamyl (flutemetamol F 18 injection) for beta-amyloid detection yesterday. The revised label, effective immediately, expands the indications for use, enables quantitative analysis of Vizamyl scans and removes previous limitations, such as monitoring patient response to anti-amyloid therapy.

It is worth mentioning that Vizamyl was first approved in 2013 to estimate beta amyloid neuritic plaque density in adult patients with cognitive impairment. GE HealthCare offers solutions for quantitative analysis of amyloid PET scans, including through its MIM Neuro Software platform, which recently received the FDA’s clearance for centiloid scaling.

The latest move is expected to significantly strengthen GE HealthCare’s Pharmaceutical Diagnostics (PDx) segment, thus boosting its business in the niche space.

Likely Trend in GEHC Stock Following the News

Following the announcement, shares of the company gained nearly 1.2% at yesterday’s close.

Historically, the company has gained a top-line boost from its various product innovations. We expect market sentiment on the stock to remain positive around this announcement, too.

GE HealthCare currently has a market capitalization of $32.96 billion. It has an earnings yield of 5.6%, better than the industry’s 0.9%. In the last reported quarter, GEHC delivered an earnings surprise of 10.9%.

Significance of GE HealthCare’s Latest FDA Approval

Per GE HealthCare, amyloid diagnostics (such as Vizamyl) have been used till now to provide a visual assessment of amyloid plaque accumulation in the brain. However, with quantification now added to the label, clinicians will likely be able to reach a more objective assessment, using software that enables a calculation of amyloid load. This is supported by published research, which demonstrates that quantification improves diagnostic confidence and consistency among readers. Additionally, with the removal of a limitation of use for monitoring therapy effectiveness, Vizamyl can now be used to assess whether the level of amyloid plaques has been reduced sufficiently for the therapy to potentially be stopped.

The label update also adds an explicit indication for selection of patients eligible for therapy and removes several previous limitations of use, including for the diagnosis of Alzheimer’s disease. The label now removes a previous limitation on predicting the cognitive decline or progression to dementia, based on evidence linking amyloid-positive scans to a higher risk of progression from the early mild cognitive impairment phase of Alzheimer’s dementia.

GE HealthCare’s management believes that the inclusion of quantification and removal of the therapy monitoring limitation from the Vizamyl label will likely enable clinicians to expand their usage of Vizamyl and provide clearer answers, earlier diagnoses and more personalized treatment strategies for patients.

Industry Prospects in Favor of GEHC

Per a report by MarketsandMarkets, the global PET market growth is expected to reach $3.5 billion by 2028 from $2.5 billion in 2023 at a CAGR of 6.6%. Factors like a growing target patient population and technological advancements are likely to drive the market.

Given the market potential, the latest regulatory clearance is expected to provide a significant boost to GE HealthCare’s business.

GE HealthCare’s Recent Developments in PDx Segment

This month, GE HealthCare showcased its innovative molecular imaging solutions to advance precision care in cardiology at the Society of Nuclear Medicine and Molecular Imaging annual meeting.

Last month, GE HealthCare received the FDA’s approval for a pediatric indication for its Optison (Perflutren Protein-Type A Microspheres Injectable Suspension, USP) ultrasound enhancing agent.

GEHC’s Share Price Performance

Shares of the company have lost 7.7% in the past year against the industry’s 11.9% rise and the S&P 500’s gain of 10.8%.

GE HealthCare’s Zacks Rank & Stocks to Consider

Currently, GEHC carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the broader medical space are Hims & Hers Health, Inc. HIMS, Cencora, Inc. COR and Integer Holdings Corporation ITGR.

Hims & Hers, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 36.5%. HIMS’s earnings surpassed estimates in two of the trailing four quarters, missed once and broke even in the other, the average surprise being 19.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hims & Hers’ shares have surged 99.2% compared with the industry’s 37.1% growth in the past year.

Cencora, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12.8%. COR’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6%.

Cencora has rallied 23.9% against the industry’s 16.9% decline in the past year.

Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 18.4%. ITGR’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 2.8%.

Integer Holdings’ shares have gained 4.9% against the industry’s 13% decline in the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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