West Pharmaceutical’s (WST) Latest Investment to Boost Business – August 16, 2022

West Pharmaceutical Services, Inc. (WST Free Report) recently announced that it has made a strategic investment in Latch Medical. The company will then acquire a minority stake in Latch Medical.

It is worth mentioning that Latch Medical is a Dublin-based renowned name in next-generation vaccine and biologics delivery technology and is pioneering a new approach for intradermal delivery.

The latest minority investment is expected to significantly boost West Pharmaceutical’s global business.

Rationale behind the investment

According to West Pharmaceutical management, the ever-evolving methods of delivering drugs to patients reflect their desire for ease of use and efficiency. Management believes the latest investment is likely to boost its business by incorporating Latch Medical’s innovative intradermal delivery technology. This, in turn, is likely to ensure total care through better outcomes and support innovative technologies that serve patients.

Latch Medical’s management believes West Pharmaceutical’s investment in it could accelerate the impact of its technology.

Industry Outlook

According to a report by bcc Research, the global market for vaccine delivery devices is expected to grow from USD 3.7 billion in 2021 to USD 4.4 billion by 2026 at a CAGR of 3.8%. Factors such as the demand for advanced vaccine delivery devices and the urgency for developed and effective vaccination devices during the COVID-19 pandemic are expected to drive the market.

Given the market potential, West Pharmaceutical’s recent investment is likely to give its business a significant boost globally.

Remarkable developments

Last month, West Pharmaceutical reported results for the second quarter of 2022, where it reported solid year-over-year growth in the overall top line and bottom line. It also saw strong performance in the proprietary product segment and continued strong demand for the company’s NovaPure, Envision and Daikyo Crystal Zenith products. Solid double-digit organic sales growth in the biologics and generics market units and mid-single-digit organic sales growth in the pharmaceuticals market unit were other quarterly highlights.

In June, West Pharmaceutical announced plans to introduce its new Daikyo Crystal Zenith (CZ) 2.25ml Needle Syringe System at the BIO International Convention. The CZ 2.25ml Inserted Needle Syringe System is an extension of the currently available 1ml Inserted Needle Syringe System.

Price Performance

The stock has lost 22.9% over the past year, compared with the industry’s 5.5% decline and the S&P 500’s 4.4% decline.


Image source: Zacks Investment Research

Zacks Rank and Stocks to Consider

West Pharmaceutical currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN Free report), Patterson Companies, Inc. (PDCO Free report) and McKesson Corporation (MCK Free report).

AMN Healthcare, currently flaunting a Zacks Rank #1 (Strong Buy), has an expected long-term growth rate of 3.2%. AMN’s earnings beat the Zacks Consensus Estimate over the past four quarters, with an average increase of 15.7%.

You can see the full list of today’s Zacks #1 Rank stocks here.

AMN Healthcare gained 4.6% against a 27.5% decline in the industry over the past year.

Patterson Companies, currently carrying a Zacks Rank #2 (Buy), has an expected long-term growth rate of 9.6%. PDCO’s earnings beat estimates over the past four quarters, with average growth of 16.5%.

Patterson Companies has gained 2.5% versus a 5.5% decline in the industry over the past year.

McKesson, currently carrying a Zacks Rank #2, has an expected long-term growth rate of 9.9%. MCK’s earnings beat estimates in three of the past four quarters and missed in one, with the average beat being 13%.

McKesson gained 82.9% against a 5.5% decline in the industry over the past year.

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