Zacks_Analysts' Blog : Schneck to Deploy Omnicell's G4 - Analyst Blog

Omnicell, Inc. (OMCL), a leading developer and marketer of end-to-end automation solutions for the medication-use process, recently announced that Schneck Medical Center will deploy its fourth-generation G4 solutions in pharmacy, nursing and perioperative care areas. The installation is expected to be completed by November 2011.

The solutions, which the company intends to deploy, include Omnicell Inventory Management Carousels with WorkflowRx software for comprehensive medication inventory management and Omnicell automated dispensing systems like OmniRx G4 Automated medication Dispensing Cabinets, Anesthesia Workstation G4, Controlled Substance management System (CSM) and Anywhere RN, which will streamline pharmacy and nursing workflow efficiency.

In May 2011, Omnicell launched its new G4 platform, which consists of next-generation software and hardware. It is a single database that empowers the company’s automated dispensing cabinet systems.Omnicell expects this platform to be the backbone for all its products and enhance the company’s medication management system and curtail administrative errors and inefficiencies that can harm patients. This platform also supports a decentralized drug dispensing model that puts medication stock for first doses and other scheduled doses close to the end users.

With the growing need for more efficient medication administration, the 113 private patient suites, Schneck chose Omnicell solutions as it estimates that implementing an integrated decentralized pharmacy practice model will result in improved operation without the disruption of whole product replacement.

Omnicell stands to benefit from favorable demographic trends, regulatory environments and a lack of nursing staff. As the information technology market is growing in leaps and bounds coupled with increasing investment from healthcare industries, Omnicell is confident about its success in the near to medium term, specially aided by its SinglePointe and Anywhere RN products.

Currently, an increasing number of institutions are planning to shift to the automated mode by procuring medication and supply solutions to address the shortage of nursing facilities in the US. Apart from the Schneck Medical contract, Omnicell entered into several other partnerships to expand its business in 2011, including University of Chicago Medical Center, Wellmont Health System. The company also entered into a partnership with Cardinal Health (CAH) to support the CardinalASSIST automatic replenishment program.

However, constrained hospital spending remains a prime concern for the company. Moreover, the company faces intense competition in the medication management and supply chain solutions market from major players such as CareFusion Corporation (CFN) and McKesson Automation (MCK).

Currently, Omnicell retains a short term Zacks #3 Rank (Hold), which supports our long term Neutral recommendation on the stock.