Analysts are predicting a strong year for shares of four medical device makers, saying that in 2010, investors may be more willing to take a risk on companies in high-growth fields.
Analyst Lawrence Neibor of Robert W. Baird, upgraded shares of Cyberonics, Inc., Edwards Lifesciences Corp., Thoratec Inc., and Volcano Corp. to Outperform from Neutral. He downgraded Boston Scientific Corp. to Neutral from Outperform because most of its revenue comes from sales of drug-coated stents and cardiac rhythm products – two markets he said are well-developed and not growing very fast.
Neibor said clinical trial data for Volcano Corp should lead to better sales of its intravascular ultrasound products, which are used to diagnose and treat vascular and heart conditions. He also likes the potential of the company’s fractional flow reserve devices, which are wires placed inside blood vessels to analyze blood flow and pressure.
Neibor said Thoratec will get $50 million to $70 million in additional sales if regulators approve the use of its HeartMate II pump in patients with end-stage heart failure, and felt that Edwards’ Sapien XT heart valve will gain new approvals in 2010 and 2011, giving the company a stronger market position.