The Spectranetics Corp (NASDAQ:SPNC)

CAPS Rating: 1 out of 5

The Company develops, manufactures, markets and distributes single-use medical devices used in minimally invasive surgical procedures within the cardiovascular system in conjunction with its proprietary excimer laser system.

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Player Avatar NetscribeHealthC (50.89) Submitted: 2/9/2007 7:44:00 AM : Outperform Start Price: $10.70 SPNC Score: +148.04

Spectranetics (SPNC) develops, manufactures, markets and distributes medical devices used in minimally invasive procedures within the cardiovascular system in conjunction with its Excimer Laser Ablation (ELA) system. The ELA system includes the CVX-300 laser unit and various fiber-optic delivery devices like disposable catheters and sheaths. The CVX-300 is the only ELA system approved by the US FDA for the treatment of multiple cardiovascular diseases. Its worldwide installed capacity currently totals nearly 550 laser systems, 87% of which are in the United States. The company also offers its products in Canada, Mexico, South America, the Pacific Rim, and Australia.

The Peripheral Artery Disease (PAD) affects 8 to 12 million Americans every year, of whom only about 25% are diagnosed as suffering from the same. Driven by an increasing prevalence of PAD among the aging US population, a growing awareness of the disease and its diagnosis and the rapid introduction of innovative diagnostic technologies, the market is expected to increase at an annual rate of approximately 18% over the next five years. Spectranetics is well positioned to capitalize on this growth in the coming years as it has an established technology platform, growing sales force and an expanding base of physicians.

The company has posted sequential revenue growth in each of its past seven quarters. For the nine months ended 30 September 2006, its revenues increased 48% reflecting an increase of 52% and 45% in disposable products and laser revenue respectively. In third quarter of 2006, the company also announced regulatory approval for the TURBO Booster. However, the company expects a limited release of the product by 2006 end, with a full market launch in early 2007.

A strong market position, technological advancement, new product launch and a capable management would enable the company’s sales to rise by atleast 30% during 2007 making the company a likely outperformer.

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