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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (82398)	7/18/2000 11:27:42 AM
From: LowtherAcademy	Respond to of 132070

this might be on interest to someone here: By K. Maxwell Murphy NEW YORK -- Shares of VidaMed Inc. (VIDA) were soaring early Monday, after C.E. Unterberg Towbin Co.started coverage of the company at strong buy. C.E. Unterberg Towbin analyst Scott Stromatt cited news posted Friday on the U.S. Health Care Financing Administration (HCFA) Web site that Medicare reimbursement for hundreds of in-office medical procedures is slated to begin Jan. 1, subject to a 60-day comment period. This is a boon for the company, whose sole product is a minimally invasive TransUrethra Needle Ablation, or TUNA, system for the treatment of benign prostatic hyperplasia, enlargement of the prostate gland, Stromatt said in an interview. "This is the news investors in VidaMed have been waiting for," he said in the note, "and we anticipate (the news) will set sales on fire this year and next." Shortly after 11 a.m. EDT, VidaMed issued a press release, saying it was "extremely pleased that HCFA has recognized the value of the TUNA procedure." Stromatt, the only analyst covering the company, placed a 12-month price target of $6 on the stock. It recently traded at 2 13/16, up 13/16, or 40.6%, on volume of 1.8 million shares, compared with a daily average of 106,700. Stromatt at C.E. Unterberg Towbin said he would be cautious of such a quick pop in VidaMed's share price. The thinly traded shares, he said, have run up in the past, only to be torpedoed by cash concerns. Day traders and momentum players sometimes cause the stock to go too far, too fast, said Stromatt. He was hoping to see the stock gradually work its way to $6 over the course of the next 12 months, and advised against excess investor exuberance. The company has had a history of losses, but Stromatt said that he conservatively thinks it can achieve profitability by the end of 2001. Benign prostatic hyperplasia, or BPH, affects over 13 million men in the U.S., he said in the research note. Other treatments for BPH, he said, include drug therapy, surgery and two other minimally invasive methods - one using lasers by a unit of Johnson & Johnson (JNJ), and one using microwaves marketed by both Urologix Inc. (ULGX) and France's Edap TMS SA (EDAPY). A panel of urologists at the annual BPH conference, held in Paris in June, recommended VidaMed's TUNA procedure, a company release Thursday said. Stromatt also said he believes the treatment is the least invasive treatment with the lowest risk of side effects. Stromatt said the medical devices sector sees many "one-trick-ponies" introduce a procedure and then get snapped up by a larger company for a tidy sum. He said he wouldn't be surprised if VidaMed were to go that route as well, and suggested that Medtronic Inc. (MDT) might choose to add to the 18% stake it took as an investment in VidaMed back in January. As reported, Medtronic purchased 5.3 million newly minted common shares and received a five-year warrant to acquire up to 30% of the number of common shares purchased, or 1.59 million, at $1.80 a share. If Medtronic exercises all of its warrants, it will then own 23% of VidaMed. A VidaMed spokeswoman said she knows of no ongoing talks with Medtronic or any other companies.