The cardiac rhythm management market is "about as bad as it has ever been," according to an analyst with Gabelli & Co., due in part to headwinds from a federal probe and a negative journal article.
"It’s partly the sluggish procedure volumes and price pressure, but there have also been some regulatory investigations here in the U.S. The Dept. of Justice and a negative article in JAMA have really cracked down on the guidelines for eligibility, and they want to make sure you’re following them as tightly as possible,” Jeff Jonas told the Wall Street Transcript. "It’s certainly weighed on the market, and it’s disrupted procedure volumes and referrals. It’s been a real headache for a lot of the companies involved."
The CRM market in the U.S. has slipped as much as 10% year over year, Jonas said, but 2011 was so bad that the comparisons will be easier in 2012.
That meant tough going for 2 of the CRM sector’s 3 main players, Boston Scientific (NYSE:BSX), Medtronic (NYSE:MDT) and St. Jude Medical (NYSE:STJ), Jonas said.
"Boston Scientific was down about 30% last year, and they’re really just in a tough spot. Their two biggest end markets are cardiac-rhythm management and drug-eluting stents, both of which are declining," he said. "Boston Scientific is really struggling for revenue growth at this point. They have some other good businesses in endoscopy and neuromodulation, but they’re just too small to move the needle. So they’ve really been dealt a tough hand, and they’re trying to cut costs."
As for St. Jude, the analyst noted that it’s taking CRM market share (even though that market is declining) and has a strong pipeline aimed at markets with more growth potential.
"They’ve dealt with the slowdown in the cardiac-rhythm management market, but they have a fantastic product pipeline in renal denervation, in atrial fibrillation, in their percutaneous heart valve program," Jonas said. "I think the outlook there is that they can still continue to grow at a high-single-digit rate on the revenue line and perhaps low double digits on the bottom line with some expense leverage and some tax savings."
Abbott logs 52-week high
Abbott (NYSE:ABT) hit a 52-week high Monday, reaching $60.56 on an upgrade from Deutsche Bank, which boosted its rating from "hold" to "buy." Read more
Settlement boosts Kensey Nash to yearlong high
Kensey Nash (NSDQ:KNSY) also hit a 52-week high after announcing a settlement with St. Jude Medical (NYSE:STJ) over its Angio-Seal vascular closure device. KNSY shares gained 15.1% the day of the announcement, cresting at $30.50 apiece along the way. Read more
Olympus looks to move beyond scandal with new device launches
Olympus (TYO:7733), reeling from an accounting scandal that’s threatened its very existence, is hoping to put the issue behind it with a trio of new product launches: A gastrointestinal video endoscopy system, a low-cost endoscopic videoscope and a surgical cutter-sealer. Read more
ActiveCare buys glucose monitoring firm 4G Biometrics
ActiveCare, which makes mobile personal emergency response systems, inked a deal to acquire 4G Biometrics and its near-real-time blood glucose monitoring service for an undisclosed amount. Read more
Mela Sciences hires Quintiles, gears for German MelaFind launch
Mela Sciences (NSDQ:MELA) signed a 2-year deal with Quintiles to help get its MelaFind skin cancer detector on the German market. Read more
MiMedx, Systagenix in EpiFix distribution pact
MiMedx (OTC:MDXG) announced a global distribution pact with Systagenix to co-market its EpiFix regenerative wound care treatment. Read more
EW-backed Sphere Medical looks for partners
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Fenwal, Applied Science ink European HemoFlow deal
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- CardioComm closes $1.6M private placement
- Institutional investors buy into GI Dynamics
- Myoscience closes $33M Series D round
- Intel leads $21M round for Tobii Technology
- Thermedical closes $1.5M Series A round
- Organovo closes $15M private placement
Analysts’ ups and downs
- Abbott (NYSE:ABT): Deutsche Bank upgrades from "hold" to "buy," sets $70 price target; Credit Suisse raises price target from $56 to $60.
- AtriCure (NSDQ:ATRC): Leerink Swann initiates coverage at "outperform," $14 price target.
- Baxter (NYSE:BAX): Goldman Sachs maintains "buy" rating.
- C.R. Bard (NYSE:BCR): Goldman Sachs upgrades from Sell to Neutral, increases price target from $86 to $98.
- Becton Dickinson & Co. (NYSE:BDX): Zacks Equity research reaffirms "neutral" rating.
- CTC Medical (NSDQ:CTCM): Gazprombank cuts price target from $25 to $23.75, reiterates "neutral" rating.
- Kensey Nash (NSDQ:KNSY): Barrington Research reiterates outperform rating, $33 price target; Jefferies increases price target from $21 to $28, keeps "hold" rating.
- Medtronic (NYSE:MDT): Oppenheimer lowers estimates through 2013, sets "outperform" rating.
- St. Jude Medical (NYSE:STJ): Goldman Sachs raises its price target to $47 from $43, maintains “neutral” rating; Barclays Capital maintains "outperform" rating, $48 price target;
- Syneron Medical Ltd. (NSDQ:ELOS): Leerink Swann maintains "outperform" rating, $14 price target.
- Teleflex (NYSE:TFX): Morgan Keegan raises price target to $60.
- Volcano (NSDQ:VOLC): Leerink Swann maintains $33 price target, "outperform" rating.
