New PillCam approvals accelerate Given Imaging's revenue gains

Given Imaging ($GVN) achieved something in the 2013 third quarter that many medical device companies would deeply covet these days: a double-digit gain in revenue and a solid jump in net income. Global sales gains, plus new product approvals in the U.S. and Japan, helped drive both numbers in what President and CEO Homi Shamir termed a "a pivotal year" for the company.

The Israeli maker of the endoscopic PillCam capsules achieved $50 million in revenue during the quarter, 10% higher than the $45.4 million booked over the same period last year. Given Imaging's net income hit $6.5 million, an 8% gain over $6 million in net income from the 2012 third quarter. Translated, that comes in at 20 cents per share, up from 19 cents per share a year ago.

Shamir said in a statement that 2013 "has proven to be a pivotal year for Given Imaging both financially as well as in terms of our progress in achieving several critical milestones."

Among the gains that Shamir said helped propel sales: PillCam SB3 won FDA and Japanese clearance, and Japan's regulators signed off on PillCam COLON.

Given said its global PillCam SB sales grew 9% and functional GI diagnostics products soared 15% year-over-year. The latter product class got a boost from Given's acquisition of SmartPill at the end of 2012. At the same time, however, operating expenses grew 13% during Q3 as Given expanded sales and marketing efforts to launch new products in Japan and elsewhere. Executives also blamed the 2.3% medical device tax for preventing results from landing at higher numbers.

Given stayed with previously stated guidance but said it will land at the lower end of the range.

Good numbers aside, not everything is smooth sailing for the company. Activist Investor Discovery Group, which owns about 4% of Given, is pushing hard for a $50 million share buyback and an outright sale to help boost value at the company. Discovery alleges that Given's share price could be much higher if it weren't hampered by a poorly executed business strategy and lost credibility with investors.

Discovery said the company's stock could net $26 to $30 in a buyout. Given's stock closed at $20.72 on Nov. 5.

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