4 Stories to Watch This Week in the Health-Care Sector

As we close in on the end of the year, news stories in the health-care sector tend to get a bit scarcer. However, this week we still have four worthwhile events to keep our attention.

First up, in the biotech sector, we have an FDA panel meeting scheduled on Friday for Zogenix (Nasdaq: ZGNX  ) and its around-the-clock, oral, pain-management drug, Zohydro ER, which uses hydrocodone without acetaminophen (a common drug that can cause liver toxicity if used excessively). In August, Zogenix reported positive phase 3 results demonstrating that the drug met its two primary endpoints: the proportion of patients with a minimum of 30% improvement in pain tolerability and satisfaction with the medication. My guess is that with few safety concerns and having been well tolerated in trials, there probably won't be too much in the way of negative news during the panel review.

As for the rest of the health-care space, it's all about three straggler earnings reports. You should know by now that earnings season never stops; it just slows down.

In the medical supplies and devices arena, we have both Cantel Medical (NYSE: CMN  ) and The Cooper Companies (NYSE: COO  ) , which are both due up to bat on Thursday.

For Cantel Medical, a maker of infection prevention and control products, it'll be looking to reverse course after falling just shy of earnings estimates in October. Cantel has been using acquisitions in recent quarters to drive growth, and shareholders saw the fruits of this approach last quarter, as gross margin rose 600 basis points to 43.3%. It isn't the least expensive products provider in the medical supply sector, nor has it shown it can consistently grow in the high single digits organically, but we should have a better understanding of where Cantel is at as of Thursday.

Cooper has also beaten estimates in three of past four quarters, but unlike Cantel, it smashed estimates by $0.16 in its most recent quarter. Cooper, which makes devices across a number of fields but has a focus on vision-related applications, saw its biggest boost come from its contact-lens segment, which grew sales by 5% (or 10% if you strip out negative currency translation). Growth was up worldwide, with Asia-Pacific sales tracking the strongest, up 16%. With organic growth driving results higher, Cooper should be set to report another solid quarter on Thursday.

Rounding out the week is generic-drug maker Hi-Tech Pharmacal (Nasdaq: HITK  ) , whose shareholders may be in for a bumpy ride. Also set to report Thursday, Hi-Tech Pharmacal has missed EPS estimates in three straight quarters and reported a doozy of a disaster in early September, when it badly missed both sales and EPS figures. In the September quarter, the company blamed the introduction of a competing drug from an Indian manufacturer to its leading generic drug, Fluticasone Propionate, which is a generic version of the allergic rhinitis treatment produced by GlaxoSmithKline (NYSE: GSK  ) known as Flonase. Hi-Tech Pharmacal also blamed a sales decline in generic glaucoma treatment Dorzolamide for its weak performance. With few generic-drug makers performing well and competition remaining fierce, I'm not sure that this will be the quarter this company turns things around.

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