Highlights from Red Chip:
Sizing Up the IVUS MArkets: "The inherent need to improve patient outcome in angioplasty, which has historically failed about one-third of the time, has prompted an $800 million market for stent devices - tiny mesh tubes permanently placed across coronary blockages - in the US. The rapid adoption of stent devices since 1994 has heightened the burden on the physician in an already complex surgical procedure. IVUS has emerged as a new tool that empowers the physician with critical visual information that helps identify the size and location of plaque buildup, helps determine optimal stent placement, and helps patient outcomes. ESON has pioneered the IVUS market, which management estimates to be about $100 million in size and growing. Today, it is both the market and technology leader with the only all -digital IVUS system on the market, and completes against mechanical IVUS systems developed by HP and Boston Scientific. Furthermore, we believe the Cardiometrics acquisition fortifies its leadership position, combining the benefits of both IVUS and the unique quantitative measurements that are afforded by the FloWire and WaveWire. This combination positions ESON with the only complete set of diagnostic tools that enable the physician to perform functional diagnostic testing directly in the cath lab. Traditionally, functional testing was limited to a stress test performed outside of the cath lab. While functional testing is a recommended guideline, it occurs in just one-third of angioplasty procedures, leaving plenty of opportunity to outfit the cath lab of the future with ESON's unique diagnostic tools.
Projecting 60% Growth in 1998: It wasn't until 1994 that ESON broke out of the research labs and began penetrating the cath lab. The Cordid/J&J distribution alliance has been a primary growth driver and will likely push 1997 sales 27% higher to an estimated $35.5 million. For 1998, we believe new products and the growing adoption of IVUS can push sales some 60% higher in 1998 to $57 million. Following its first year of profitability, we anticipate more than a doubling of profits in 1998 to $.39 per share. |
