AtriCure stock rises 20 percent on approval news

June 16, 2010 by MedCity News

The Food & Drug Administration's approval of AtriCure Inc.'s AtriClip system could be a boon not only for heart patients, but investors, too.

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By Mary Vanac

Shares of West Chester, Ohio-based AtriCure Inc. (NASDAQ:ATRC) rose more than 20 percent Tuesday, a day after the Food & Drug Administration approved the company's AtriClip system for sale in the United States.

AtriCure shares rose as high as $7.20, ending the day up $1.07 at $6.30. More than 1 million AtriCure shares traded hands. That's 26 times as many shares than traded on any day in the last three months.

The keen investor interest makes sense. Chief Executive Officer David Drachman called receiving the FDA's 510(k) clearance for his company's system "a major product and clinical milestone." The Cincinnati, Ohio-area company received European clearance, known as the CE Mark, to sell the device in October.

In May, during his company's first-quarter conference call with analysts, Drachman estimated the U.S. market for the AtriClip Gillinov-Cosgrove Left Atrial Appendage Exclusion System at "approximately 185,000 patients representing a market opportunity for our AtriClip system of roughly $150 million per year."

That's a huge opportunity, especially considering AtriCure had 2009 revenue of only $54.5 million, which was down 1 percent from $55.3 million in 2008. The company that's barely past the development stage has yet to make an annual profit.

Yes, the system is partly named for Cleveland Clinic CEO Dr. Delos "Toby" Cosgrove, who co-invented it with colleague Dr. Marc Gillinov. The two thoracic and cardiovascular surgeons pioneered the practice of using a clip to block a thumb-sized pouch on top of the left side of the heart to cut down on blood clots that could lead to strokes for patients who have atrial fibrillation.