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Biotech / Medical : PLC Systems -- Ignore unavailable to you. Want to Upgrade?

To: Rick Costantino who wrote (636)	4/22/1998 12:29:00 PM
From: Rob C.	Respond to of 1202

The Forbes artilce... Whipsaw NOTHING'S MORE volatile than a medical stock awaiting FDA approval for a promising product. Especially if the company's business plan isn't so hot. Example: PLC Medical Systems (ASE: PLC), whose medical laser system is scheduled to go before an FDA panel April 24. At a recent $17.69, stock has whipsawed from $27 last summer to $7 in December. PLC lost money on $9 million in revenues last year. PLC's system, typically a last resort for patients who've had repeated heart surgeries, is used in a type of angina surgery called transmyocardial revascularization. Through a small incision between the ribs, the laser creates new channels in the heart to get blood into oxygen-starved areas. Sounds great. But PLC's experimental procedure isn't covered under Medicare and is hideously expensive. The machines cost $500,000 each. But PLC has begun placing lasers in hospitals that pay $25,000 and agree initially to conduct about 30 procedures a year, at $3,500 per use. Another concern: Eight competitors, including U.S. Surgical and outfits backed by Johnson & Johnson and Baxter International, are developing cheaper and more versatile technologies. So says Kurt Kruger, analyst at NationsBank Montgomery Securities. Two rivals, Eclipse Surgical Technologies and Cardiogenesis, may be nearing their own FDA panel hearings. Though most analysts think PLC will gain FDA approval for its laser system, shortsellers are betting that after an initial pop, shares will drop by half. Stock is borrowable if you want to short, but wait until after the FDA ruling to avoid getting caught in a squeeze.