Why Cochlear (ASX:COH) shares are up 3%

Cochlear (ASX: COH) shares are up 3% after making a positive announcement regarding FDA approval.

What is Cochlear?

Cochlear is one of the world’s leading medical businesses. Cochlear designs, manufactures and supplies the Nucleus cochlear implant, the Hybrid electro-acoustic implant and the Baha bone conduction implant. Graeme Clark invented the first device in 1982, allowing first-user Graham Carrick to hear for the first time for 17 years. Some of the most recent modifications allow users to play sound from their phone directly into their implant.

What did Cochlear announce?

The hearing device business has obtained US Food and Drug Administration (FDA) approval for four new products.

Those products are: Nucleus Kanso 2 Sound Processor, Nucleus 7 Sound Processor for Nucleus 22 implant recipients, Custom Sound Pro fitting software and the Nucleus SmartNav system.

These four new products will be commercially released in the US and Western Europe in the next few months, subject to local approvals.

These new products sound quite impressive for users. For example, the Nucleus Kanso 2 Sound Processor is apparently the world’s smallest off-the-ear cochlear implant sound processor with proven hearing performance technologies. The Nucleus SmartNav helps supports surgeons in optimising electrode placement during cochlear implant surgery.

Summary

Cochlear continues to release impressive technology. The US is a huge, important market so it’s good that Cochlear has been successful at getting these approved. The Cochlear share price is almost back to $200 again. It still has a pretty high p/e ratio, so I’m not sure that I’d want to buy it today. I would rather go for a smaller healthcare share like Volpara (ASX: VHT).

Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned. 

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