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Wednesday September 20, 9:30 am Eastern Time
Press Release
SOURCE: Banc of America Securities
Major Medical Products and Devices to Experience Sustained Growth Through 2005 According to Banc of America Securities Equity Analyst
SAN FRANCISCO, Sept. 20 /PRNewswire/ -- The following is being issued by Banc of America Securities, a member of the National Association of Securities Dealers, CRD number 26091:
``Investing in the medical products field in the past couple of years has been a little like flying major airlines this summer. We've experienced delays, some euphoria, many cancellations but we also got a few that actually took off,'' said Kurt H. Kruger, Medical Supplies and Devices analyst at Banc of America Securities. ``We were pleased to have been associated with two of the stocks that hit lift off this year: St. Jude Medical and MiniMed''
(Photo: newscom.com )
Kruger made his comments at the 30th Annual Banc of America Securities Investment Conference, which runs through September 23 at the Ritz-Carlton Hotel in San Francisco. The five-day conference features 250 presentations from companies that are driving the Business Services, Consumer & Retail, Energy, Entertainment, Media & Telecom, Financial Services, Health Care, Industrial Growth, Real Estate & Lodging and Technology industries.
The medical products and devices sector continues to experience high and sustainable operating margins, Kruger said. Although acquisition action is not as brisk as it's been, there are some major potential acquisitions on the block.
Comparing medical products with the pharmaceutical sector, Kruger noted that many of the larger medical device companies are every bit as attractive as the drug companies. While drug companies are facing generic substitution and increasingly dilutive direct-to-consumer advertising, the device companies have built powerful franchises that block competition and provide durability. Furthermore it is unlikely that devices will ever be marketed directly to the consumer -- having to pitch to professionals is simply a more profitable endeavor. Generally, the device sector is expected to experience top line growth, with compounded annual growth rates averaging 12%, he said.
``Three of the major categories that we traffic in -- cardiology, orthopedics, and neurology -- will experience sustained growth to 2005,'' Kruger said. Cardiology devices are being developed for increasing numbers of Americans with congestive heart failure and atrial fibrillation. In orthopedics, the fastest growing area will be devices for six million Americans with back pain -- a good portion of which will be parts fashioned from cadaver bone. Neurology, involving the use of electrical stimulation to treat the large population and crushingly debilitating disorders such as epilepsy, Parkinson's and depression, is the fastest grower with compounded annual growth rates projected at 40%.
Kruger's stock picks in the cardiology group include Medtronic (MDT) and St. Jude (STJ); in neurology, Cyberonics (CYBX); in orthopedics, Biomet (BMET) and Regeneration Technology (RTIX). He also rates MiniMed (MNMD) a Strong Buy.
Banc of America Securities, a subsidiary of Bank of America Corporation, is a full-service investment bank and brokerage firm. With principal offices in San Francisco, New York City and Charlotte, Banc of America Securities employs more than 4,200 associates in offices around the country and, with affiliates, offers capabilities worldwide.
Bank of America, with $680 billion in assets, is the holding company for the largest bank in the United States. It provides international corporate financial services for more than two million businesses conducting transactions in 190 countries. More corporations, small businesses and consumers use online banking and investing services from Bank of America than any other financial services company in the United States. The company's stock (ticker: BAC) is listed on the New York, Pacific and London stock exchanges, and certain shares are listed on the Tokyo Stock Exchange.
SOURCE: Banc of America Securities |
