It's earnings time again, and analysts are making their predictions about the fates of companies. In his latest investor note, Canaccord Genuity analyst Jason Mills names 5 medtech companies that he views as potential acquisition targets within the next year or so: AtriCure, HeartWare, Spectranetics, Thoratec and Volcano.
- AtriCure ($ATRC): AtriCure recently announced the FDA's Circulatory System Devices Panel will meet Oct. 26 to review the company's PMA for its Synergy ablation system. Mills anticipates the panel will give a favorable review of the system, and the FDA will ultimately sign off on it as well. "We expect the Panel decision to be favorable (noting ABLATE was halted early because of strong results) and expect the subsequent FDA approval (mid-2012E), coupled with commencement of the DEEP AF hybrid ablation trial, not to mention to products recently launched and in the pipeline, will drive accelerating growth in the company's US ablation business beginning in 2012 and continuing thereafter," Mills writes. He notes AtriCure has a number of growth drivers in the U.S. and elsewhere, including the AtriClip, hybrid surgical/catheter procedure, A-Fib labeling and new product launches. And Mills also likes the company's leadership position in the A-Fib market, as well as its new products and pipeline.
- HeartWare ($HTWR): Framingham, MA-based HeartWare develops miniaturized ventricular assist devices to treat heart failure. It received CE Mark approval for its ventricular assist system, which is now commercially available in Europe, in January 2009. Australian authorities also gave their blessing for the system earlier this year. In the U.S., the system is the subject of an ongoing bridge-to-transplant clinical trial. Mills expects the company to have "modestly better than expected results based on strong EU adoption and solid U.S. trial enrollment." He also anticipates the FDA will bless the system early next year.
- Spectranetics ($SPNC): Spectranetics, which has been around since the 1980s, markets the only Excimer laser system approved in the U.S., Canada, Europe and Japan for use in minimally invasive interventional procedures within the cardiovascular system, according to the company's website. In the short term, the company is looking forward to Japanese approval for the Turbo Elite and Quick Cross products, as well as an FDA ok for a line extension to the Turbo Tandem above-the-knee product. Over the summer, the company named a new CEO, Scott Drake.
- Thoratec ($THOR): Thoratec develops therapies to address advanced-stage heart failure. During its second quarter 2011, it recorded revenues of $111.2 million, a 17% increase versus the same period of 2010. Canaccord has modeled revenues of about $104 million for the third quarter. Over the summer, Thoratec acquired the medical business of Levitronix for $110 million upfront and up to $40 million in potential future cash earnout payments.
- Volcano ($VOLC): Volcano develops, manufactures and commercializes devices designed to help during endovascular procedures, enhance the diagnosis of vascular and structural heart disease and guide optimal therapies, according to the company's website. During the second quarter, the company said revenues increased 14% versus the same period last year. And Mills sees good things to come for the company. "Competitively, we think VOLC is well positioned globally in the intravascular imaging with a robust cadence of new products expected out of the pipeline, which we think can sustain growth above the majority of med-tech companies/sectors," he writes.
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