Here is some basic info: (note that this info was dated 4/2/96)
Arterial Vascular Engineering
Expected Price: $15-$17
Use of Proceeds: Seven-tenths to the company for marketing, R&D, clinical trials, and manufacturing assets; five million shares will be offered, and 30.1 million will be outstanding.
Underwriter: Cowen(212-495-6000)
FINANCIAL DATA*
Six months ended December 1995
Net Sales $21,700
Oper. Income 14,300
Net Income 9,600
Net Income per Share 0.32
BALANCE SHEET DATA*
Pro forma for December 1995
Total Assets $74,800
Long-term Debt None
Stockholders' Equity 71,300
*thousands, except per share
--Its prospectus says Arterial Vascular Engineering "designs, develops, manufactures and markets a variety of stent systems and balloon angioplasty catheters for the treatment of coronary artery disease." The catheters are inflated within a partially blocked artery to expand the blood vessel. But in one-third to half of the 370,000 balloon angioplasties performed in 1993 in the U.S., there was re-closure of the artery.
The stents, now Arterial's big seller (77% of revenues), are made of a stainless steel mesh fitted over a balloon. Upon inflation after angioplasty, the mesh permanently expands, and is left in place, preventing re-closure in seven eighths of applications.
Neither of Arterial's product lines has been FDA-approved for sale in the U.S.; most sales are to Europe. Approval of the stent isn't expected before 1998.
WORTH NOTING: Arterial's shares are offered at about 15 times likely earnings for the present fiscal year. Market capitalization will approach a half-billion dollars, but sales will be but one-tenth of that figure. Those valuations may seem high for an unproven operation, but Arterial has some striking characteristics.
Arterial has a 44% return on sales, after full taxes. Hardly a company in the world does better. Cost of goods sold is only 23% of sales, while R&D and overhead are under 7% of sales. And those numbers are achieved without contracting out manufacturing. Revenue progress is clearly present, too, for sales are quintuple those of the prior fiscal year's first half, and this year's first six months' revenues already are well ahead of the total for the prior full year. Yet there are no revenues from the U.S., the biggest market for both
products.
The principal risk here may be whether both revenue growth and the high profitability can continue. A slackening pace on either front would be very likely to depress the shares, and in the December quarter, sales and earnings were unchanged. There's also a chance of patent infringement suits by other stent makers, which include larger companies such as Johnson & Johnson and Pfizer. On the other hand, most companies have worse risks, and Arterial's performance to date does not suggest that growth or profits are due to decline.
If your looking for any other info, just let me know and I will see what I can dig up. |
